The Assumption That the Cash Flows from an Investment Project

question 350

Multiple Choice

The assumption that the cash flows from an investment project are reinvested at the company's discount rate applies to:

• A) both the internal rate of return and the net present value methods.
• B) only the internal rate of return method.
• C) only the net present value method.
• D) neither the internal rate of return nor net present value methods.

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Definitions:

Semantics

The meaning of words and sentences in a particular language.

Matrices

Rectangular arrays of numbers, symbols, or expressions arranged in rows and columns that are subject to specific mathematical rules.

Implement

To put into effect or action; to execute a plan, agreement, or method.

Evaluate

The process of making a judgment or forming an opinion about something after careful consideration of its merits and demerits.