Discussion
By Descartes' rule of signs, the number of real positive roots cannot exceed the number of
Answer: D
Correct answer: sign changes in the cash flow sequence
Descartes’ rule bounds the number of positive real roots of a polynomial by the number of sign changes in its coefficients. Applied to the present worth equation, the coefficients are the cash flows, so the number of possible internal rates cannot exceed the number of times the cash flow changes sign. It is an upper bound, not a count.
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