For mutually exclusive projects the underlying cause of conflicts in ranking for projects by internal rate of return and net present value methods is:
A) the reinvestment rate assumption regarding cash flows.
B) that neither method explicitly considers the time value of money.
C) the assumption made by the IRR method that intermediate cash flows are reinvested at the cost of capital.
D) the assumption made by the NPV method that intermediate cash flows are invested at the internal rate of return
ANSWER
A
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