ROI Analysis

All business decisions should be made based on Return on Investment (ROI) analysis.

In particular, Internal Rate of Return (IRR) is a very effective tool for looking at the return  on a series of investments and the resulting cash flows.

Risk also needs to  modeled into an ROI or IRR calculation using an expected value methodology.

Common risks which are often not fully considered include: warranty, IPR indemnification, product liability, and supply chain disruption.

 

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