Harvard Business Review

OCTOBER 16, 2013

Yet the decision to green-light a project is usually based solely on “expert opinions” — in other words, executives’ intuition supplemented by standard regression analysis. Most companies – including the movie studios in Hollywood – over-rely on basic tools like discounted cash flow and net present value.

Discounted Cash Flow 8

Discounted Cash Flow Net Present Value Comparison Tools 8

Harvard Business Review

APRIL 9, 2015

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. You can use one or more of four ROI calculation methods: payback, net present value , internal rate of return, and profitability index.

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

MARCH 23, 2015

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. But finance people like me are skeptical even when the proposals do project a return. Here’s why. Excerpted from.

Finance 8

Finance NPV CFO ROI 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. Overcome your fears. Related Video.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

DECEMBER 2, 2010

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. We call this the Opportunity Value (OV) of an asset. This creates real value because the cash can be redeployed elsewhere.

NPV 14

NPV Net Present Value Price Engineering 14

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. billion.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

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 Benchmarking Long-term 8

Harvard Business Review

SEPTEMBER 27, 2012

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. Many people believe that complex problems require complex decision-making models.

Strategy 8

Strategy Proposal Guidelines Net Present Value 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.

ROE 14

ROE Long-term GDP Six Sigma 14

Harvard Business Review

JANUARY 11, 2012

Note what isn't part of the decision: an idea's net present value or return on investment. You should expect that after some period of time testing the team leader will come back and say one of three things: "We can't address a key risk, so we stopped the project.". "We

Company 15

Company Net Present Value How To Proposal 15

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.

Innovation 50

Innovation NPV Business Model Constraint 50