The IRR method assumes that ________. a. Cash flows are reinvested at the firms cost of attracting
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The IRR method assumes that ________.
a. Cash flows are reinvested at the firm’s cost of attracting funds when they are received
b. Cash flows of a project are never reinvested
c. Cash flows are reinvested at the internal rate of return when they are received
d. The NPV of a project is negative
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c Cash flows are reinvested at the internal rate of return when they are received The IRR method is ...View the full answer
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Internal rate of return is a method of calculating an investment’s rate of return. The term internal refers to the fact that the calculation excludes external factors, such as the risk-free rate, inflation, the cost of capital, or financial risk.
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