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I would like help with the question. Please, use Descartes's rule for Net Cash flow and Norstrom's for Cumulative CF. Please, show all your steps. Thank you so much. Determine the maximum number of i* values for the cash flow shown below Year Expense Income Net cash flow Cumulative CF

I would like help with the question. Please, use Descartes's rule for Net Cash flow and Norstrom's for Cumulative CF. Please, show all your steps. Thank you so much. Determine the maximum number of i* values for the cash flow shown below Year Expense Income Net cash flow Cumulative CF

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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I would like help with the question. Please, use Descartes's rule for Net Cash flow and Norstrom's for Cumulative CF. Please, show all your steps. Thank you so much. Determine the maximum number of it values for the cash flow shown below Year Expense Income Net cash flow Cumulative CF -12,000 -12,000 -12,000 -14,000 + 3,000 +9,000 1 -5,000 -2,000 -6,000 +3,000 -11,000 3 -7,000 +15,000 +8,000 -3,000 -8,000 +16,000 +8,000 +5,000 +4,000 -9,000 +8,000 -1,000 Solution: The sign on the net cash flow changes twice, indicating two possible i* values The cumulative cash flow begins negatively with one sign change Therefore, there is only one i* value (i* = 8.7%) %3D
Transcribed Image Text:I would like help with the question. Please, use Descartes's rule for Net Cash flow and Norstrom's for Cumulative CF. Please, show all your steps. Thank you so much. Determine the maximum number of it values for the cash flow shown below Year Expense Income Net cash flow Cumulative CF -12,000 -12,000 -12,000 -14,000 + 3,000 +9,000 1 -5,000 -2,000 -6,000 +3,000 -11,000 3 -7,000 +15,000 +8,000 -3,000 -8,000 +16,000 +8,000 +5,000 +4,000 -9,000 +8,000 -1,000 Solution: The sign on the net cash flow changes twice, indicating two possible i* values The cumulative cash flow begins negatively with one sign change Therefore, there is only one i* value (i* = 8.7%) %3D
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