The IRR method assumes the cash flows are reinvested at the internal rate of return rather than the required rate of return.

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The IRR method assumes that cash flows are reinvested at the internal rate of return, which is the rate at which the project's net present value is zero. This is different from the required rate of return, which reflects the opportunity cost of capital and is used to discount the cash flows to their present value.

The IRR Method Assumes the Cash Flows Are Reinvested at the Internal