Deos the NPV-Net Present Value assumes reinvestment at the cost of capital ?

Question:

I was reading a text book about Project Management and it says that NPV-Net Present Value assumes reinvestment at the cost of capital . Would somebody explain this to me ?

Answer:
NPV is the sum of all of the cash flows. Not what they are worth when they come in but what they would be worth today. To find out what they would be worth today you need to discount at the cost of capital. This done by using this equation: CF/(1+k)^n
CF: cash flow
k: cost of capital (the interest rate to borrow from a bank)(also known as discount rate in other situations)
n: number of years (or periods because it could be half years, quarter years etc.)
^: to the power of
Now all you do is discount every CF back n years to find Present value then sum them all up to find net present value. (don't forget to subtract the amount of money going out.)

If its priced too high he won't buy it.

Deos the NPV-Net Present Value assumes reinvestment at the cost of capital ?

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