The ________ assumes returns are reinvested at the cost of capital.

Question

Quizplus · Accepted Answer

The net present value method assumes returns are reinvested at the cost of capital, which is why it is considered a more accurate measure of profitability than the payback method or internal rate of return method. Capital rationing procedure is not a method for evaluating investment projects but a process used to allocate limited resources among competing projects.

The ________ Assumes Returns Are Reinvested at the Cost of Capital