Describe the reinvestment assumption employed by NPV and IRR methods of capital budgeting.
Question:
Describe the reinvestment assumption employed by NPV and IRR methods of capital budgeting.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 69% (13 reviews)
The NPV has no reinvestment rate assumption therefore the reinvestment rate ...View the full answer
Answered By
Joane Gacer
Pasionate English Teacher with a wide experience of teaching English and aim of helping young learners to achieve their goals in learning English as second language.
0.00
0 Reviews
10+ Question Solved
Related Book For
Basic Finance An Introduction to Financial Institutions, Investments and Management
ISBN: 978-1285425795
11th Edition
Authors: Herbert B. Mayo
Question Posted:
Students also viewed these Business questions
-
In what sense is a reinvestment rate assumption embodied in the NPV and IRR methods? What is the assumed reinvestment rate of each method?
-
In what sense is a reinvestment rate assumption embodied in the NPV, IRR, and MIRR methods? What is the assumed reinvestment rate of each method?
-
In what sense is a reinvestment rate assumption embodied in the NPV, IRR, and MIRR methods? What is the assumed reinvestment rate of each method?
-
1. Debate whether or not online retailers should be required to collect state sales taxes. Suggest an equitable solution to this issue. 2. Research online tax rules. Look specifically at the 1992...
-
Using PSpice, find the h parameters of the network in Fig. 19.123. Take = 1 rad/s O- +1F 2 I H
-
How much antifreeze must be added to a gallon of \(60 \%\) antifreeze to obtain an \(80 \%\) mixture?
-
Suppose \(\mathbf{x} \sim M N(n, \boldsymbol{\pi})\) follows a multinomial distribution of size \(n\) and probability \(\pi\). Derive the variance matrix of \(\mathbf{x}\).
-
On January 1, 2014, Geffrey Corporation had the following stockholders equity accounts. Common Stock ($20 par value, 60,000 shares issued and outstanding) ......$1,200,000 Paid-in Capital in Excess...
-
What are some business benefits of adopting the relational database model within an organization? How does a relational model create or enhance business value? Are there any limitations to using a...
-
What is a balanced scorecard? What is its primary objective?
-
Determine if an investment should be made, using NPV and IRR.
-
Define mutually exclusive investments and be able to select among them.
-
Let {v1,..., vn} be a basis of V and let T: V V be a linear transformation. (a) If T(v1) = v1 for each i, show that T = 1v. (b) If T(v1) = -v1 for each i, show that T = -1 is the scalar operator...
-
Why do economists use WTP as a measure of the value someone places on an environmental good or ecosystem service?
-
Is there any evidence for an environmental Kuznets curve for forestry?
-
Explain the main differences between weak and strong sustainability, and why these matter for government policy on sustainable development.
-
How does the idea of a 'fat tail' extreme event affect the economics of climate change?
-
If people reverse their preferences for risky events, should the government incorporate or ignore their behaviour when making public policy?
-
A monatomic ideal gas is thermally insulated, so no heat can flow between it and its surroundings. Is it possible for the temperature of the gas to rise? (a) Yes. The temperature can rise if work is...
-
If a and b are positive numbers, find the maximum value of f ( x ) = x a (9 x ) b on the interval 0 x 9.
-
Why are hedge funds and private equity funds of little interest to most investors?
-
REITs pay dividends in order to retain their favorable tax status. As the next chapter on stock explains, corporate dividends are made from earnings. REIT dividends often are not made from earnings...
-
Currently a stock index stands at 100 and the leveraged ETF is selling for $100. The ETF should generate a return that is twice the daily return on the index. Over the next 21 days the value of the...
-
Martinez Company buys merchandise on account from Marigold Company for $592. Martinez sells the goods to Ellis for $900 cash. Use a tabular summary to record the transactions for Martinez Company...
-
The section has tension and compression steel reinforcement. When the neutral axis depth is at infinity, c = , the section is in uniform compression, all points on the section have 0.003 compressive...
-
The Big Choo Choo Company (BCCC) owns a rail line from the town of Isolated to the coastal port of Notso. It cost them $20 million to build the rail line in 2016. It is now 2023. The Small Gold...
Study smarter with the SolutionInn App