Why So Many Different Loan Types Exist

Strategy Driven

When it comes to business, there’s one thing everyone needs to get started: financing. If you’re not looking to finance a business, getting these small amounts is beneficial. Because of these multiple numbers, credit scores can be a lot more accurate, and predict your likeliness to go into debt when you can’t make up with payments after a certain period. Credit scores dictate what you can and can’t get because of your payback period or payment rate.

A Refresher on Payback Method

Harvard Business

There are a variety of ways to calculate a return on investment (ROI) — net present value , internal rate of return , breakeven — but the simplest is payback period. What is payback period? Payback is by far the most common ROI method used to express the return you’re getting on an investment. ” The shorter the payback period, the better. This is the major limitation of the payback method.


Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Hospital Budget Systems Are Holding Back Innovation

Harvard Business

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. Second, it will not receive credit for the large benefits from savings in future years; so unless the payback period from the new investment is realized in the current year, hospitals will reject the proposal to buy the technology. Gillian Blease/Getty Images.

Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. This notion, that risk is a desirable feature, can seem like sacrilege to anyone who’s taken an introductory finance course. Martin Konopka/EyeEm/Getty Images. The market caps of just four companies, Apple, Alphabet, Amazon, and Microsoft, now exceed $3 trillion.


How GE Stays Young

Harvard Business Review

People in finance at GE, typically focused on return on investment and payback periods, love FastWorks because they get a better throughput of ideas. GE is an icon of management best practices. Under CEO Jack Welch in the 1980s and 1990s, they adopted operational efficiency approaches (“ Workout ,” “Six Sigma,” and “Lean”) that reinforced their success and that many companies emulated.

How to Better Manage Your Company’s Utility Bills

Harvard Business Review

This process, known as “ retrocommissioning ” often does not require any capital outlays and can have a simple payback under two years. In our experience, well-designed retrofits can deliver 20%-50% energy savings with fast payback periods. is on a commercial rate with their utility, and that rate includes a demand charge—essentially a premium for companies that use a lot of power over a short period of time (rather than using a constant rate).