IRR -> Reinvestment Assumption or Myth (and what it actually means)
I've been trying to wrap my head around a downside of using IRR - the reinvestment assumption. I don't really understand the concept on how IRR assumes that we reinvest at the IRR, if IRR is for discounting backwards. Would be great if someone had an analogy or example so I can understand the actual concepts. Also, some people say that it's a myth or fallacy, and the IRR does not actually assume anything, which makes me even more confused. There's barely any information available, and I've tried to read all the research papers yet I still do not understand. Please help.
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