A Further Note on Unrecovered Investment, Uniqueness of the Internal Rate, and the Question of Project Acceptability

Richard H. Bernhard and Carl J. Norstrøm

Journal of Financial and Quantitative Analysis, 1980, vol. 15, issue 2, 421-423

Abstract: In a recent issue of the Journal of Financial and Quantitative Analysis, Bernhard [2] has pointed out and discussed the seemingly paradoxical possibility that P it for all t. He showed that this can happen when there are one or more additional values of r in the (−1, 0) interval or when the unique r in the [0, ∞) interval consists of multiple coinciding roots. The further point to be shown here is that it can also happen even when r is unique and simple in the (−1, ∞) interval. Thus the phenomenon is considerably more general than Bernhard had implied.

Date: 1980
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