Harvard Business Review

AUGUST 15, 2016

Most executives know that the present value of an investment comes from projecting its cash flows and discounting those numbers into today’s dollars. The general rule is projects with positive net present values should get funded, and those with negative ones shouldn’t.

Net Present Value 8

Net Present Value Entrepreneur Christensen Innovation 8

Harvard Business Review

AUGUST 3, 2018

The second category should describe the investments on future-oriented projects. By investing in digital companies, investors are often buying call options on moonshot projects with lottery-like payoffs. The current rules mandate no disclosures on future-oriented projects.

Report 8

Report GAAP Company Proposal 8

Harvard Business Review

SEPTEMBER 13, 2017

Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years. For slaughterhouses and retailers (Brazilian operations), we also projected positive benefits: $20 million to $120 million (0.01% to 0.1%

Supply Chain 8

Supply Chain Net Present Value Retail Cost of Capital 8

Harvard Business Review

APRIL 9, 2015

Analyzing ROI isn’t always as simple as it sounds and there’s one mistake that many managers make: confusing cash and profit. Everything that goes into getting the project up and running has to be part of your initial cash outlays. A project or initiative that is likely to take several months will be harder.

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

MARCH 31, 2017

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. “You are not going to be involved in running projects unless you understand the financials,” he says. The Refresher: Net Present Value. How can you boost your financial acumen?

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

JULY 9, 2012

I was just in Las Vegas spending time at the Downtown Project backed by Zappos CEO Tony Hsieh (who self-professes that Luck serves as a core factor in his success). The Downtown Project aims to create a community of entrepreneurship and ideas to transform the core of Las Vegas.

Net Present Value 15

Net Present Value Entrepreneur Strategic Fit Open-book 15

Harvard Business Review

MARCH 10, 2011

To make sure they're comparing apples to apples, they discount those future cash flows to arrive at their net present value. The motivation behind it, as with many, many articles published over HBR's nearly 90-year history, was to take an effective practice developed in one corner of industry and spread it to managers everywhere.

CAPM 13

CAPM Cost Discounted Cash Flow Cost of Capital 13

Harvard Business Review

DECEMBER 2, 2010

Since the Three Horizons represent different levels of uncertainty, they need to be managed and valued differently. The higher level of uncertainty associated with H2 and H3 necessitates an updated valuation methodology that takes into account more than the net present value (NPV) of the target. Alexander B.

NPV 14

NPV Net Present Value Price Engineering 14

Harvard Business Review

SEPTEMBER 27, 2012

Managers in these organizations translate corporate objectives into a few straightforward guidelines that help employees make on-the-spot decisions and adapt to constantly shifting environments, while keeping the big picture in mind. Its new management team took over an organization that was bureaucratic, overstaffed, and bleeding cash.

Strategy 8

Strategy Proposal Guidelines Net Present Value 8

Harvard Business Review

NOVEMBER 25, 2013

Moreover, the previous year’s survey showed that 63 percent of projects do not use analytics to inform marketing decisions. CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

APRIL 2, 2014

Others, most notably money managers and former Fama students Cliff Asness and John Liew in an epic Institutional Investor article , have done a lot recent to clarify how Fama’s ideas and Shiller’s can at least co-exist peacefully. It seems like the clearest practical lessons from this academic work have been in asset management.

CAPM 8

CAPM Discount Price Finance 8

Harvard Business Review

MAY 1, 2017

In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins. The Refresher: Net Present Value. They create flux time for employees to devote to new projects. (3M, Related Video. Bain recently completed research on workforce productivity.

ROE 14

ROE Long-term GDP Six Sigma 14

Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital. How do they do it? How do they do it?

Innovation 50

Innovation NPV Business Model Constraint 50