The NPV method is based on the assumption that projects' cash flows are reinvested at the project's risk-adjusted cost of capital.

Question

Quizplus · Accepted Answer

The NPV method takes into account the time value of money and discounts future cash flows at the project's risk-adjusted cost of capital. This assumes that any cash flows generated from the project are reinvested at the same rate of return as the project itself.

The NPV Method Is Based on the Assumption That Projects