Calculation of the internal rate of return incorporates the implicit assumption that net cash flows from a project can be reinvested at the internal rate of return.

Question

Quizplus · Accepted Answer

The calculation of the internal rate of return (IRR) indeed assumes that all net cash flows generated by the project can be reinvested at the IRR itself, which is a key consideration in its interpretation and application.

Calculation of the Internal Rate of Return Incorporates the Implicit