Which of the following is not an assumption of the internal rate of return model?
A)The amount and timing of all cash flows is known exactly.
B)All cash flows occur at the end of the year.
C)Cash inflows from the project are reinvested in another project earning a return equal to the internal rate of return.
D)All of these answer choices are assumptions of the internal rate of return model.

Question

Quizplus · Accepted Answer

The internal rate of return model assumes that all cash flows are known, occur at the end of the year, and are reinvested at the IRR. Therefore, all the given choices are assumptions of the IRR model.

Which of the Following Is Not an Assumption of the Internal