The IRR assumes that all project cash flows can be reinvested to earn [...]
Answer
a rate of return exactly equal to the IRR itself.
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#reading-7-discounted-cashflows-applications
Question
The IRR assumes that all project cash flows can be reinvested to earn [...]
Answer
?
Tags
#reading-7-discounted-cashflows-applications
Question
The IRR assumes that all project cash flows can be reinvested to earn [...]
Answer
a rate of return exactly equal to the IRR itself.
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Subject 1. NPV and IRR le.
Reinvestment
The IRR is intended to provide a single number that represents the rate of return generated by a capital investment. As such, it is an easy number to interpret and understand. However, calculation of <span>the IRR assumes that all project cash flows can be reinvested to earn a rate of return exactly equal to the IRR itself. In other words, a project with an IRR of 6% assumes that all cash flows can be reinvested to earn exactly 6%. If the cash flows are invested at a rate lower than 6%, the realized return
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