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Re‐examination of the reinvestment rate assumptions

Re‐examination of the reinvestment rate assumptions The paper compares the Net Present Value and the Internal Rate of Return Methods paying particular attention to Mutually Exclusive Projects. In addition it looks into the reinvestment rate assumption concept. Using a different approach to those used to‐date, it is shown that the reinvestment assumption should not concern analysts, provided they use the Net Present Value Method. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

Re‐examination of the reinvestment rate assumptions

G.A. Karathanassis
Managerial Finance , Volume 30 (10): 9 – Oct 1, 2004
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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0307-4358
DOI
10.1108/03074350410769317
Publisher site
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Abstract

The paper compares the Net Present Value and the Internal Rate of Return Methods paying particular attention to Mutually Exclusive Projects. In addition it looks into the reinvestment rate assumption concept. Using a different approach to those used to‐date, it is shown that the reinvestment assumption should not concern analysts, provided they use the Net Present Value Method.

Journal

Managerial Finance – Emerald Publishing

Published: Oct 1, 2004

Keywords: Net present value; Internal rate of return; Mutually exclusive projects

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