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Cory Yeung Cory Yeung
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3 years ago
For mutually exclusive projects the underlying cause of conflicts in ranking for projects by internal rate of return and net present value methods is

▸ the reinvestment rate assumption regarding cash flows.

▸ that neither method explicitly considers the time value of money.

▸ the assumption made by the IRR method that intermediate cash flows are reinvested at the cost of capital.

▸ the assumption made by the NPV method that intermediate cash flows are invested at the internal rate of return.
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Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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asdfgfdasdfgfd
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