You are the project manager at Happy Coffee Café, a rapidly growing franchise selling premium blended coffee. Currently, your company is planning on opening additional stores throughout Europe. Your company is evaluating different areas for expansion, including France, Germany, and England. You intend to use NPV (net present value) analysis to evaluate which area provides the best opportunity for expansion. Which of the following statements are true regarding NPV calculations?
A. NPV assumes that the cost of capital is based on the LIBOR (London Inter Bank Offer Rate)
B. NPV assumes that the cash inflows are reinvested at the cost of capital
C. NPV is the discounted rate when IRR is equal to zero
D. NPV is constrained optimization method
E. NPV is the discount rate when IRR is greater than zero
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