The net present value method assumes that project cash flows can be reinvested at the company's ________.
A) internal rate of return
B) required rate of return
C) growth rate
D) accounting rate of return

Question

Quizplus · Accepted Answer

The net present value (NPV) method assumes that project cash flows can be reinvested at the company's required rate of return. This is because the NPV calculation discounts future cash flows back to their present value using the required rate of return as the discount rate, reflecting the minimum return that investors expect the company to earn on its investments.

The Net Present Value Method Assumes That Project Cash Flows