Why is it true that a reinvestment rate is implicitly assumed whenever we find the present value

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Why is it true that a reinvestment rate is implicitly assumed whenever we find the present value of a future cash flow? Would it be possible to find the PV of a FV without specifying an implicit reinvestment rate?

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Fundamentals Of Financial Management

ISBN: 9780357517574

16th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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Question Posted: Feb 26, 2024 10:01 AM

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Why is it true that a reinvestment rate is implicitly assumed whenever we find the present value

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When finding the present value PV of a future cash flow whether through the Net Present Value NPV calculation or discounting future cash flows theres ...View the full answer

Fundamentals Of Financial Management

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