Which of the following capital budgeting techniques implicitly assumes that the cash flows are reinvested at the company's minimum required rate of return?

$\begin{array}{lrr} \text {Net Present Value}& \text { Internal Rate of Return}\\end{array}$

A.$\begin{array}{lrr}
&&\text { Yes } &&&&&&&& \text { Yes } &\
\end{array}$

B.$\begin{array}{lrr}
&& \text { Yes } &&&&&&&& \text { No} &\
\end{array}$

C.$\begin{array}{lrr}
&& \text { No} &&&&&&&& \text { No } &\
\end{array}$

D.$\begin{array}{lrr}
&& \text { No } &&&&&&&& \text { Yes } &\
\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following capital budgeting techniques implicitly assumes that the cash flows are reinvested at the company's minimum required rate of return?

$\begin{array}{lrr} \text {Net Present Value}&  \text { Internal Rate of Return}\\end{array}$

A.$\begin{array}{lrr}
  &&\text { Yes } &&&&&&&& \text { Yes } &\
\end{array}$

B.$\begin{array}{lrr}
&&  \text { Yes }  &&&&&&&& \text { No} &\
\end{array}$

C.$\begin{array}{lrr}
 && \text { No}  &&&&&&&& \text { No } &\
\end{array}$

D.$\begin{array}{lrr}
 && \text { No } &&&&&&&& \text { Yes } &\
\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

The Net Present Value (NPV) method assumes that cash flows are reinvested at the company's minimum required rate of return, while the Internal Rate of Return (IRR) assumes reinvestment at the IRR itself.

Which of the Following Capital Budgeting Techniques Implicitly Assumes That Net Present Value Internal Rate of Return\begin{array}{lrr} \text {Net Present Value}& \text { Internal Rate of Return}\\\end{array}Net Present Value​ Internal Rate of Return​

Which of the Following Capital Budgeting Techniques Implicitly Assumes That $\begin{array}{lrr} \text {Net Present Value}& \text { Internal Rate of Return}\\\end{array}$