If you don't reinvest the money you receive from an investment, you are allowing yourself to get back less than the 10% you invested for. The example given in the book explains that if you invest in a $1000 bond that pays 8% over 20 years, you will receive $80 per year. If you decide not to reinvest that money, you will receive a total of $2,600, which equates to about a 4.9% IRR. If you reinvested the $80 you receive each year from the bond you invested in, you would have earned $4,661.4.8 When the present value of the benefit returns is greater than the original cost of the investment made, the investment is considered satisfactory. For IRR, as long as the return is higher than the required rate of return, it could also be recognized as a satisfactory investment. 4.9 Risk is the uncertainty about the actual return on an investment. The risk-return trade-off is a relationship between risk and return in which investors want to get the highest return possible based on the risk they are willing to take. The greater the risk, the greater the profit