Multiple Choice
The underlying cause of conflicts in ranking for projects by internal rate of return and net present value methods is
A) the reinvestment rate assumption regarding intermediate cash flows.
B) that neither method explicitly considers the time value of money.
C) the assumption made by the NPV method that intermediate cash flows are reinvested at the internal rate of return.
D) the assumption made by the IRR method that intermediate cash flows are reinvested at the cost of capital.
Correct Answer:
Verified
Correct Answer:
Verified
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