The net present value (NPV) method implicitly assumes that the rate at which cash flows can be reinvested is the required rate of return, whereas the internal rate of return (IRR) method implies that the firm has the opportunity to reinvest at the project's IRR.

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The NPV method assumes reinvestment at the hurdle rate (required rate of return), while the IRR method assumes reinvestment at the project's own IRR, which may not always be realistic.

The Net Present Value (NPV) Method Implicitly Assumes That the Rate