Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital.

Innovation 50

Innovation NPV Business Model Constraint 50

Harvard Business Review

DECEMBER 2, 2010

To do this, we combine two separate frameworks: the first is the Three Horizon strategic model developed by McKinsey. The other is a process called Opportunity Engineering (OE) that instills a different way to look at value. We call this the Opportunity Value (OV) of an asset.

NPV 14

NPV Net Present Value Price Engineering 14

Harvard Business Review

FEBRUARY 7, 2011

Anyone who has had to make the argument for an investment knows the basic tool involved: a Net Present Value (NPV) calculation. The overall value of a foreign investment is equal to the NPV of the expected stream of profits for the life of the investment.

NPV 12

NPV Short-term Discount Politics 12

Harvard Business Review

MARCH 31, 2017

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. The most important concepts to grasp are “how to measure profitability, EBITDA, operating income, revenue, and operating expenses,” he says. The Refresher: Net Present Value.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

MAY 1, 2017

In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins. The Refresher: Net Present Value. Next time you're deciding about a big investment, NPV can help you make a more informed decision. Related Video.

ROE 13

ROE Long-term GDP Six Sigma 13