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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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Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

health care system. Explanations include their IT departments already have their hands full installing, maintaining, and upgrading electronic health record (EHR) systems. But much of the blame can be attributed to hospitals’ misaligned budgeting and incentive systems. Gillian Blease/Getty Images.

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A Refresher on Internal Rate of Return

Harvard Business Review

You’ve got a great idea for a new product that will increase revenue or a new system that will cut the company’s costs. There are a variety of methods you can use to calculate ROI — net present value , payback, breakeven — and internal rate of return , or IRR. A Refresher on Net Present Value.

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Debt and the Future of the U.S.

Harvard Business Review

During the financial crisis, the world came to the apparently shocking realization that debt financing entails risks. Consider, for example, that the estimated net present value of obligations under the Social Security system is approximately $8 trillion.

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The Most Common Mistake People Make In Calculating ROI

Harvard Business Review

Your company is ready to make a big purchase — a fleet of cars, a piece of manufacturing equipment, a new computer system. Sure, you may know this already, but people who haven’t studied finance often find this statement confusing. Finance & Accounting Tool. Excerpted from. HBR TOOLS: Return on Investment.

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Shape Strategy With Simple Rules, Not Complex Frameworks

Harvard Business Review

That system was efficient, but the new management team decided that, at this moment in its history, the company needed adaptability more than efficiency. To prioritize projects, for instance, the ALL team could have forecast future cash flows for every potential investment and ranked all proposals on the basis of their net present value.

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Why Those Guys Won the Economics Nobels

Harvard Business Review

He got his PhD at Yale under Shiller’s supervision in 1984, but since then he has also done a lot of work expanding on Fama’s ideas about risk and return, some of it co-authored with Fama’s son-in-law and University of Chicago finance colleague, John Cochrane. And Lars has taken some of these ideas and applied them in finance.

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