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Describe the reinvestment rate problem associated with comparing projects using the internal rate of return.

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Describe the reinvestment rate problem associated with comparing projects using the internal rate of return.

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This solution explains what the reinvestment rate is used for when using the internal rate of return (IRR) to compare the profitability of projects.

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In real estate, the reinvestment rate is the interest rate that you would earn on cash that the investment creates over the life of the investment. The internal rate of return is the rate of return used to measure and compare the profitability of ...

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Keonda Grant-Taylor, MBA
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  • MBA, Webster Univeristy
  • Dual BS Degrees, University of South Carolina
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