Remove Management Remove Net Present Value Remove Payback Period Remove ROI

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. I talked with Joe Knight, author of the HBR TOOLS: Return on Investment and cofounder and owner of www.business-literacy.com , to learn more about how to understand and use this particular ROI method. What is payback period? A Refresher on Net Present Value.

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An HBR Refresher on Breakeven Quantity

Harvard Business Review

“It’s one of the more popular ways that managers calculate marketing ROI,” says Avery, pointing out that other common ones include calculating the investment payback period, calculating an internal rate of return, and using net present value analysis. ” The other forms of ROI often require a more complex understanding of financial concepts such as the firm’s cost of capital or the time value of money.

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