Under the net present value (NPV)method,cash flows are assumed to be reinvested at:

Question

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Under the NPV method, cash flows are assumed to be reinvested at the company's discount rate. This is because the discount rate represents the cost of capital for the company and is used to evaluate the profitability of potential investments. Therefore, it is assumed that any cash flows generated from an investment will be reinvested at the same rate as the company's cost of capital.

Under the Net Present Value (NPV)method,cash Flows Are Assumed to Be