The NPV Method's Assumption That Cash Inflows Are Reinvested at the Cost

question 101

True/False

The NPV method's assumption that cash inflows are reinvested at the cost of capital is generally more reasonable than the IRR's assumption that cash flows are reinvested at the IRR.This is an important reason why the NPV method is generally preferred over the IRR method.

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Definitions:

Quebec

A province in eastern Canada, known for its French-speaking population and distinctive French-Canadian culture.

Samuel de Champlain

A French navigator, cartographer, and explorer credited with founding New France and Quebec City in the early 17th century.

1608

A year marked by significant historical events, such as the founding of the city of Quebec by the French explorer Samuel de Champlain.

Black Legend

Idea that the Spanish New World empire was more oppressive toward the Indians than other European empires; was used as a justification for English imperial expansion.