Abstract
Abstract This paper examines the uniqueness of the internal rate of return for the subscription/membership problem. This problem is characterized by the comparison of alternatives with different length lives, which produces a time series with multiple sign changes. A typical example would be solved using the equation $10(A/P, i, 2) = $12(A/P, z, 3). Although these sign changes imply the possibility of multiple non-negative rates of return, a declining yearly cost with longer length lives is shown to be sufficient to guarantee a unique rate of return. A number of published sufficiency conditions for the uniqueness of the non-negative internal rate of return are shown to be inadequate for this problem.
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