Harvard Business Review

NOVEMBER 5, 2013

When making big decisions, executives use familiar tools like discounted cash flow analysis far too often. It’s much more useful to take a different approach: to build multiple qualitative scenarios, for example, or to develop a set of comparative reference cases.

Discounted Cash Flow 10

Discounted Cash Flow Discount Tools Video 10

Harvard Business Review

OCTOBER 16, 2013

Yet the decision to green-light a project is usually based solely on “expert opinions” — in other words, executives’ intuition supplemented by standard regression analysis. Most companies – including the movie studios in Hollywood – over-rely on basic tools like discounted cash flow and net present value.

Discounted Cash Flow 8

Discounted Cash Flow Net Present Value Comparison Tools 8

Harvard Business Review

MARCH 10, 2011

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. Yeh, William S. Schulze, and Michael H. McNulty et al.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

JUNE 8, 2018

Digital companies, however, consider scientists’ and software workers’ and product development teams’ time to be the company’s most valuable resource. These criteria assume a limited supply of financial capital and that prudent allocation of financial capital determines a firm’s success.

Report 8

Report GAAP Net Present Value CFO 8

Harvard Business Review

MARCH 10, 2011

Download this pdf for an executive summary, or login here for the full report.) Fully 79 percent of companies, including 91 percent with annual revenues greater than $1 billion, use discounted cash flow techniques. Only 17 percent believe their estimates are accurate within 25 basis points.

Cost of Capital 13

Cost of Capital CAPM Cost Discounted Cash Flow 13