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rapht | 1 year ago

A primer on valuation: in many financial contexts, $1 of operating savings may be worth much more than $1 of investment.

That is because an investment is a one-off, so it's actually worth $1, but the savings are recurring, so they are worth the same number of years that a company's profits are valued. Depending on sector and investors' beliefs in the future of companies, this factor is typically in the 5-20x range. That means that $1 of savings is well worth at least $5 of investments.

Factor in anything you want!

discuss

order

shermantanktop|1 year ago

In an ideal org, perhaps. In many places, forming that team starts a process where it continually finds reasons to still exist, so your $1m is yearly until a reorg.

Sigh.

admax88qqq|1 year ago

If that $1 of investment doesn't yield any returns that's not an investment it's just an expense.

So yes $1 of savings is worth more than $1 of spending.

TheNewsIsHere|1 year ago

You could potentially take it as an investment loss for tax purposes. Whether that’s proper depends greatly on the circumstances surrounding how the money was accounted for and spent.