Hostname: page-component-cb9f654ff-hn9fh Total loading time: 0 Render date: 2025-08-25T04:34:42.362Z Has data issue: false hasContentIssue false
  • English
  • Français

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

Published online by Cambridge University Press:  06 April 2009

Richard H. Bernhard  and
Carl J. Norstrøm
Get access Rights & Permissions [Opens in a new window]

Extract

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 < 0 even though there is a unique r in the [0, ∞) interval, and that r > 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.

Information

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 15 , Issue 2 , June 1980 , pp. 421 - 423
Copyright
Copyright © School of Business Administration, University of Washington 1980

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

REFERENCES

[1]Bernhard, Richard H. “A Comprehensive Comparison and Critique of Discounting Indices Proposed for Capital Investment Evaluation.” The Engineering Economist, Vol. 16, No. 3 (Spring 1971), pp. 157–186.Google Scholar
[2[Berhard, Richard H. “Unrecovered Investment, Uniqueness of the Internal Rate, and the Question of Project Acceptability.” Journal of Financial and Quantitative Analysis, Vol. 12, No. 1 (03 1977), pp. 33–38.CrossRefGoogle Scholar
[3[Bernhard, Richard H. “A Simplification and an Extension of the Bernhard-de Faro Sufficient Condition for a Unique Non-negative Internal Rate of Return.” Journal of Financial and Quantitative Analysis, Vol. 15, No. 1 (03 1980), pp. 201–209.CrossRefGoogle Scholar
[4[Norstrϕm, Carl J. “A Modification of the Internal Rate of Return Method.” Statstϕkonomisk Tidsskrift, No. 4 (1971), pp. 214–231.Google Scholar
[5[Norstrϕm, Carl J. “A Sufficient Condition for a Unique Non–negative Internal Rate of Return.” Journal of Financial and Quantitative Analysis, Vol. 7, No. 3 (03 1972), pp. 1835–1839.Google Scholar
[6[Soper, C. S. “The Marginal Efficiency of Capital: A Further Note.” The Economic Journal, Vol. 69, No. 273 (03 1959), pp. 174–177.Google Scholar
[7[Turnbull, H. W.Theory of Equations (fifth ed.) Edinburgh: Oliver and Boyd, Ltd. (1952).Google Scholar