Explanation of the term "Implicit Reinvestment Assumption".
With reference to the IRR method of capital investment evaluation, explain what is meant by "implicit reinvestment assumption". When might it cause a problem?
Reinvestment Rate Assumption - 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?
Net Present Value (NPV), IRR, and MIRR methods - 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?
NPV, IRR, and MIRR - 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?