The net present value and internal rate of return have different assumptions regarding cash flows. net present value assumes that all cash flows are reinvested at one consistent discount rate, while the internal rate of return assumes that all cash flows are reinvested at the internal rate of return (similar yielding investments).

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The Net Present Value (NPV) method assumes that cash flows are reinvested at the discount rate, whereas the Internal Rate of Return (IRR) method assumes reinvestment at the IRR itself, leading to different assumptions about the reinvestment of cash flows.

The Net Present Value and Internal Rate of Return Have