The capital investment decision making model that assumes that each cash inflow is reinvested at the project's own rate of return is

Question

Quizplus · Accepted Answer

The capital investment decision making model that assumes that each cash inflow is reinvested at the project's own rate of return is the internal rate of return (IRR). This formula calculates the discount rate at which the net present value of all cash inflows equals the initial investment. It assumes that all cash inflows can be reinvested at the IRR, which is also known as the project's own rate of return. Therefore, option D is the correct answer.

The Capital Investment Decision Making Model That Assumes That Each