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A Refresher on Payback Method

Harvard Business Review

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? ” The shorter the payback period, the better. ” This can lead to some deceiving calculations.

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How to Get People to Collaborate When You Don’t Control Their Salary

Harvard Business Review

” People in industries as different as commercial real estate, pharma, biotech startups, hedge funds, and public school districts worried about how to transform a competitive, star-driven culture into a collaborative one when they had no power to juggle financial rewards and no influence over promotion decisions.

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An HBR Refresher on Breakeven Quantity

Harvard Business Review

I talked with Jill Avery, a senior lecturer at Harvard Business School and co-author of HBR’s Go To Market Tools , to better understand how to use this important calculation. While the concept may be straightforward, the calculation and the assumptions underlying it are far from simple. What is breakeven quantity (BEQ)?

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Walmart Broadens ROI for Green Power

Harvard Business Review

It also recognizes that, in the meantime, operational managers will gain valuable experience and knowledge about how to optimize the new power systems. Bedore said as much.until he added the critical caveat that in the case of green power, Walmart bean counters were looking beyond the near-term payback.

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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. It’s also possible that we simply don’t know how to estimate the right parameters to make an options-based valuation work.

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How GE Stays Young

Harvard Business Review

A fundamental challenge of any firm – especially a huge global company such as GE – is how to balance nurturing tomorrow’s future businesses, with the resource demands for running and improving today’s operations. Resource allocation: i ncubating a protected class of ideas. Partnering: getting ideas from start-ups.

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An Inside View of How LVMH Makes Luxury More Sustainable

Harvard Business Review

One luxury leader, LVMH, provides a great example of how to build a robust sustainability program. Charles Gibb, Belvedere’s CEO, says it made a strategic choice to invest in this project, even though it had a longer payback period than normal. These companies can’t ignore sustainability.