The _____ method of capital investment decision making assumes that each cash inflow received is reinvested at the required rate of return.

Question

Quizplus · Accepted Answer

The net present value (NPV) method of capital investment decision making assumes that each cash inflow received is reinvested at the project's required rate of return. This is a key feature of the NPV method, which discounts future cash flows back to their present value using the required rate of return as the discount rate.

The _____ Method of Capital Investment Decision Making Assumes That