- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 5. Capital Investments and Capital Allocation
- Subject 2. Capital Allocation
CFA Practice Question
NPV and IRR methods can give different results for independent projects due to all of the following EXCEPT FOR ______.
A. differences in the timing of cash flows
B. differences in reinvestment rate assumptions
C. cost of capital for projects
Explanation: Differences in the scale of investments can be a factor too. The cost of capital does not affect project rankings. It does affect the decision to accept or reject projects, however.
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