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Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

Despite a one-year payback period and a highly positive net present value (NPV) from this investment, the department will often reject the attractive opportunity. Consider the opportunity to raise spending in Year 1 by $100,000 to acquire technology that would decrease spending each year thereafter by $100,000.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Financial capital is assumed to be virtually unlimited, while certain types of human capital are in short supply.

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