What must be the uniform annual sales volume of the product

Reference no: EM131926829

Problem

Nadine Chelesvig has patented her invention. She is offering a potential manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump sum payment to her of $160, 000. Plan B calls for an annual payment of $13, 000 plus a royalty of $1.50 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 10 %/year. Nadine uses a MARR of 10 %/year. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on an annual worth analysis?

Reference no: EM131926829

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