On a Purely Theoretical Basis, NPV Is the Better Approach

question 133

True/False

On a purely theoretical basis, NPV is the better approach to capital budgeting than IRR because IRR implicitly assumes that any intermediate cash inflows generated by an investment are reinvested at the firm's cost of capital.

---

Definitions:

Subsistence

The action or fact of maintaining or supporting oneself, especially at a minimal level.

Ju/'hoansi

A group of indigenous people living in the Kalahari Desert of southern Africa, known for their hunter-gatherer lifestyle.

Average Weight

The mean weight of a collection of items or individuals calculated by dividing the total weight by the number of items or individuals.

Mixed Subsistence Strategy

A way of living that involves combining different methods of obtaining food, such as hunting, gathering, farming, and trading.