Harvard Business Review

MARCH 17, 2016

Any time you propose a capital expenditure, you can be sure senior leaders will want to know what the return on investment (ROI) is. 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.

Rate of Return 8

Rate of Return IRR NPV Net Present Value 8

Harvard Business Review

APRIL 18, 2016

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. A Refresher on Net Present Value. For that reason, net present value is often the preferred method.

Payback Period 8

Payback Period Net Present Value ROI Rate of Return 8

Harvard Business Review

MARCH 23, 2015

Most finance managers in both large and small businesses encounter numerous proposals for capital investments and many of the people proposing these investments don’t have a clear picture of what the return will be. But finance people like me are skeptical even when the proposals do project a return. Here’s why.

Finance 8

Finance NPV CFO ROI 8

Harvard Business Review

SEPTEMBER 27, 2012

Any proposal, the rules said, should: remove obstacles to growing revenues, minimize up-front expenditure, provide benefits immediately (rather than paying off in the long term), and. Once they understood the rules and their underlying rationale, ALL's employees generated a series of innovative proposals based on what they had to work with.

Strategy 8

Strategy Proposal Guidelines Net Present Value 8

Harvard Business Review

APRIL 9, 2015

Companies may have more than one hurdle rate depending on the risk involved in proposed investments. You can use one or more of four ROI calculation methods: payback, net present value , internal rate of return, and profitability index. Evaluate the investment. This is the final step.

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

MARCH 29, 2018

Despite a one-year payback period and a highly positive net present value (NPV) from this investment, the department will often reject the attractive opportunity. Consider the opportunity to raise spending in Year 1 by $100,000 to acquire technology that would decrease spending each year thereafter by $100,000.

Budgeting 8

Budgeting System Innovation Payback Period 8

Harvard Business Review

NOVEMBER 25, 2013

CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. For instance, CMOs often focus on brand awareness, TV ad impressions, or share of voice in the market, which do not easily translate into financial impact.

CFO 8

CFO Short-term Long-term Benchmarking 8