The net present value method can indicate erroneous decisions as it implicitly assumes that project cash flows can be reinvested at the project's rate-of-return.

Name: The net present value method can indicate erroneous decisions as it implicitly assumes that project cash flows can be reinvested at the project's rate-of-return.
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Question

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The net present value (NPV) method assumes that project cash flows are reinvested at the discount rate, not the project's rate of return.

The Net Present Value Method Can Indicate Erroneous Decisions as It