NPV is preferred to IRR because it assumes that each cash inflow is not reinvested at the required rate of return.

Name: NPV is preferred to IRR because it assumes that each cash inflow is not reinvested at the required rate of return.
Brand: Quizplus
Rating: 4.9 (46 reviews)

Question

Quizplus · Accepted Answer

NPV is preferred to IRR because it assumes that each cash inflow is reinvested at the project's cost of capital, providing a more realistic measure of profitability compared to IRR's often unrealistic reinvestment rate assumption.

NPV Is Preferred to IRR Because It Assumes That Each