What capital investment decision-making model assumes that each cash inflow is reinvested at the required rate of return?

Question

Quizplus · Accepted Answer

The net present value (NPV) method assumes that each cash inflow is reinvested at the project's required rate of return. This is a key feature that distinguishes NPV from other capital budgeting methods, as it takes into account the time value of money by discounting future cash flows back to their present value using the required rate of return.

What Capital Investment Decision-Making Model Assumes That Each Cash Inflow