The internal rate of return method implies that intermediate cash flows are reinvested at the internal rate of return Under what circumstances is this assumption likely to lead to a seriously biased measure of the economic return from the project ...

Problems may result if the reinvestment rate available to the company differs sharply from ...

The internal rate of return method implies that intermediate cash flows are reinvested at the internal rate

Question:

The method implies that intermediate cash flows are reinvested at the Under what circumstances is this assumption likely to lead to a seriously biased measure of the economic return from the project?
Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment...