MIRR, Explained: How the Modified Internal Rate of Return Fixes IRR's Reinvestment Fantasy
MIRR fixes IRR by compounding interim cash at a realistic reinvestment rate — a 21.7% IRR becomes an honest 17.8% you can actually earn.
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Decision-making
Data-driven decision making with financial insights
Sell or Process Further? How to Decide Whether to Sell Joint Products at Split-Off or Keep Processing
Process further only when the added revenue beats the separable cost — joint costs are sunk and never enter the math. Worked example plus four traps.
The Balanced Scorecard, Explained: How Four Perspectives Turn Strategy Into Measures a Small Business Actually Tracks
The Balanced Scorecard turns strategy into measures across financial, customer, process, and learning perspectives — linked bottom-up in one cause-effect chain.
Equivalent Annual Cost, Explained: How to Compare Equipment and Projects With Unequal Lives
EAC annualizes each option's lifetime cost into a level yearly charge — lowest EAC wins, whatever the sticker prices say.
Segment Margin, Explained: The Number That Settles Whether a Product Line Earns Its Keep
Segment margin is revenue minus variable and traceable fixed costs — drop a segment only when avoidable costs exceed lost revenue.
Equity Multiple, Explained: How Total Distributions Over Invested Equity Measures a Deal's Absolute Return
Equity multiple is total cash distributions divided by total equity invested — 2.0x means you doubled your money, with no adjustment for time or fees.
Investment Policy Statement, Explained: How to Write Your One-Page Investing Contract
An investment policy statement puts your goals, allocation, rebalancing and review rules on one page, so panic cannot rewrite your plan mid-drawdown.
Net Present Value (NPV), Explained: How Discounting Future Cash at Your Hurdle Rate Tells You Whether a Project Creates Value
NPV discounts every future cash flow to today's dollars at your hurdle rate — a positive total means the project creates value, so accept it.
Internal Rate of Return (IRR), Explained: The Discount Rate That Zeros Out NPV, the Hurdle-Rate Rule, and the Traps
IRR is the discount rate that zeroes a project's NPV — accept only above your cost of capital, and cross-check high readings with MIRR.
Joint Costs and the Split-Off Point, Explained: How Makers Allocate Shared Production Costs
Joint costs split at the split-off point by physical units, sales value, or NRV — but sell-or-process-further decisions must use incremental dollars only.
Profitability Index, Explained: How to Rank Capital Projects by Present Value per Dollar Invested
Profitability index is the present value of inflows over the initial investment — fund projects above 1.0, highest PI first when the budget is capped.
Opportunity Cost, Explained: The Hidden Price Tag on Every Business Decision
Opportunity cost is the value of your next-best forgone alternative — price DIY bookkeeping against a $400 hire before your hours subsidize it.