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Second, Bedore spoke about how Walmart thinks about its investments in green power: "There is an ROI calculation on all sustainability investments like on all projects, but.we The company can also reap the immediate variablecost benefits of free power. EPA's latest list of the top 50 renewable energy buyers.
“It’s one of the more popular ways that managers calculate marketing ROI,” says Avery, pointing out that other common ones include calculating the investment payback period, calculating an internal rate of return, and using net present value analysis. The variablecosts to make each pair of flip flops are $14.00.
As he put it, “If you only want me to make decisions that have a clear ROI, then you should get out of the stock.” ” Cook’s gut reaction to defend actions that don’t have a clear ROI is admirable — and he has the legal right to make strategic decisions and investments, as does every CEO.
But it is tough for public companies in particular to spend money when they think it doesn’t pay back in traditional ROI terms. Ultimately, second path is clearly the most likely, and the clean economy will dominate over time on purely economic terms — a variablecost of basically zero for renewable energy will win out.
As each of these companies expands its fixed-cost infrastructure, profits grow geometrically because the additional variablecost of adding each new user is near zero. Adding a profile on Facebook has little to no impact on Facebook's operating costs. Greater scale bestows greater competitive advantage.
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