The NPV method implicitly assumes that the rate at which cash flows can be reinvested is the required rate of return,whereas the IRR method implies that the firm has the opportunity to reinvest at the project's IRR.

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The NPV method assumes reinvestment at the hurdle rate (required rate of return), while the IRR method assumes reinvestment at the internal rate of return, which is a project-specific rate.

The NPV Method Implicitly Assumes That the Rate at Which