Explain the Difference Between a "Harebrained Scheme" and a "Stroke

question 30

Essay

Explain the difference between a "harebrained scheme" and a "stroke of genius" as it relates to creativity, and describe the different ways that creativity can be assessed.

---

Definitions:

Present Value Payback Period

A capital budgeting technique that calculates the period of time required for the present value of future cash flows to cover the initial investment cost.

NPV

Net Present Value, a calculation used to determine the current value of a series of future cash flows.

PI

The profitability index (PI), in financial management, is a method used to evaluate the desirability of an investment or project, calculating the ratio of the present value of future cash flows to the initial investment.

Cost of Capital

A financial metric representing the minimum return that a company must earn on its existing asset base to satisfy its creditors, owners, and other providers of capital.