A STUDY ON REINVESTMENT RATE OF CAPITAL AND TRUE RATE OF RETURN

자본의 재투자율과 순수익율에 대한 연구

The assumption of reinvestment rate leads to the results conflicting with the priority order of investments determined by net present worth. It has been revealed through various studies that the priority order of projects determined by the criteria based on internal rate of return is different from that determined by present worth. This study is to find out how to define reinvestment rate of return influencing the decision-making of the priority order through examining the meanings of reinvestment rate of capital and true rate of return, and to present some examples with a simple mathematical model.