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Re‐examination of the reinvestment rate assumptions

G.A. Karathanassis (Athens University of Economics and Business, Department of Business Administration, Patission 76, 10434, Athens, Greece)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 October 2004

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.

Keywords

Citation

Karathanassis, G.A. (2004), "Re‐examination of the reinvestment rate assumptions", Managerial Finance, Vol. 30 No. 10, pp. 63-71. https://doi.org/10.1108/03074350410769317

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited