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When It Pays to Think Like a Finance Manager

Harvard Business Review

If you want approval for a new project — purchasing new equipment or computer systems, applying for a patent, building a new store — chances are you need your company’s finance department on board. To get the green light, it helps to understand how finance people think. Finance & Accounting Tool.

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How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business Review

If you’re not a numbers person, finance is daunting. Stop avoiding finance because you’re afraid of numbers. Think of it this way, “Finance is the way businesses keep score. “Finance and accounting are very simple. .” “Finance and accounting are very simple. Overcome your fears.

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A Refresher on Internal Rate of Return

Harvard Business Review

According to Knight, it’s commonly used by financial analysts in conjunction with net present value, or NPV. With NPV you assume a particular discount rate for your company, then calculate the present value of the investment ( more here on NPV ). Finance & Accounting Article. Further Reading.

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Will You Be Writing Off Your Investment in Egypt?

Harvard Business Review

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.

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The Refresher: Net Present Value

Harvard Business Review

Next time you’re deciding about a big investment, NPV can help you make a more informed decision.

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Old Buildings Are U.S. Cities’ Biggest Sustainability Challenge

Harvard Business Review

Today large commercial buildings address only two percent per year of the NPV-positive investments in efficiency that are available to them. This is especially true in the commercial buildings market, specifically large commercial buildings, where well over 75 percent of existing buildings will still be in use in fifteen years’ time.

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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. Instead, the finance office can allow the department to keep some of the savings it created, in excess of the original acquisition cost, in future year budgets.