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Management · Q475

Financial Management

Graduate and Post Graduate · Management · question 475

Q475

In calculation of internal rate of return, an assumption states that received cash flow from project must

A.
be reinvested
Answer
B.
not be reinvested
C.
be earned
D.
not be earned

Answer: Option A

Solution

Answer: Option A
Solution:
In calculation of internal rate of return, an assumption states that received cash flow from project must be reinvested. The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.