The reinvestment rate assumption that the cash flows from a project can be reinvested at the internal rate of return, is made in the _____.

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The reinvestment rate assumption is made in the Internal Rate of Return (IRR) method, which assumes that cash flows generated by a project can be reinvested at the IRR. This assumption is not made in the other methods. In the net present value (NPV) method, cash flows are discounted at the required rate of return, which may be different from the IRR. The discounted payback period method and the payback period method do not explicitly consider the time value of money, and therefore do not make any assumptions about reinvestment rates. The Modified Internal Rate of Return (MIRR) method is a modified version of the IRR method that explicitly assumes that cash flows are reinvested at the required rate of return, not the IRR.

The Reinvestment Rate Assumption That the Cash Flows from a Project