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 $30,000. Plan B calls for an annual payment of $1,000 plus a royalty of $0.50 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 10 percent/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?

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 $30,000. Plan B calls for an annual payment of $1,000 plus a royalty of $0.50 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 10 percent/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?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 6E

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Kermit is considering purchasing a new computer system. The purchase price is $118,014. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $8,443 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the system but will save $70,648 per year through increased efficiencies. Kermit uses a MARR of 12 percent to evaluate investments. What is the net present worth for this new computer system?
Aline has three contracts from which to choose. The first contract will require an outlay of $100 000 but will return $160 000 one year from now. The second contract requires an outlay of $200 000 and will return $300 000 one year from now. The third contract requires an outlay of $250 000 and will return $355 000 one year from now. Only one contract can be accepted. If her MARR is 20 percent, which one should she choose?
A regional municipality is studying a water supply plan for its tri-city and surrounding area to the end of the year 2070. To satisfy the water demand, one suggestion is to construct a pipeline from a major lake some distance away. Construction would start at the beginning of 2030 and take five years at a cost of $20 million per year. The cost of maintenance and repairs starts after completion of construction and for the first year is $3 million, increasing by 1 percent per year thereafter. At an interest rate of 7 percent, what is the present worth of this project? Assume all cash flows take place at year-end. Consider the present to be the end of 2025/the beginning of 2026. Assume there is no salvage value at the end of the year 2070.
Aline has three contracts from which to choose. The first contract will require an outlay of $100,000 but will return $165,000 one year from now. The second contract requires an outlay of $210,000 and will return $319,000 one year from now. The third contract requires an outlay of $280,000 and will return $396,000 one year from now. Only one contract can be accepted. If her MARR is 25 percent, which one should she choose? For the increment from the do-nothing alternative to the first contract, the IRR is percent. For the increment from the first contract to the second contract, the IRR is percent. For the increment from the second contract to the third contract, the IRR is percent. Therefore, should be chosen. (Type integers or decimals rounded to one decimal place as needed.)
Plz correct answer only I posted it before but the answer was wrong Plz give only correct solution And Don't give previous solutions Don't use chat gpt
Match the measures of worth in the first column with an appropriate definition from the second column.
please solve all of three subpart.
If ERR > MARR, then IRR > ERR > MARR. A) True (B) False
A regional municipality is studying a water supply plan for its tri-city and surrounding area to the end of year 2070. To satisfy the water demand, one suggestion is to construct a pipeline from a major lake some distance away. Construction would start at the beginning of 2030 and take five years at a cost of $25 million per year. The cost of maintenance and repairs starts after completion of construction and for the first year is $3 million, increasing by 2 percent per year thereafter. At an interest rate of 6 percent, what is the present worth of this project? Assume all cash flows take place at year-end. Consider the present to be the end of 2025/beginning of 2026. Assume there is no salvage value at the end of year 2070. i=6%.What is the present worth of this project is?
A regional municipality is studying a water supply plan for its tri-city and surrounding area to the end of year2070. To satisfy the water demand, one suggestion is to construct a pipeline from a major lake some distanceaway. Construction would start at the beginning of 2030 and take five years at a cost of $30 million per year.The cost of maintenance and repairs starts after completion of construction and for the first year is $2 million,increasing by 2 percent per year thereafter. At an interest rate of 8 percent, what is the present worth of thisproject? Assume all cash flows take place at year-end. Consider the present to be the end of 2025/beginningof 2026. Assume there is no salvage value at the end of year 2070.Click the icon to view the table of compound interest factors for discrete compounding periods when i=8%.The present worth of this project is $ million.(Round to two decimal places as needed
A regional municipality is studying a water supply plan for its tri-city and surrounding area to the end of year 2070. To satisfy the water demand, one suggestion is to construct a pipeline from a major lake some distance away. Construction would start at the beginning of 2030 and take five years at a cost of $15 million per year. The cost of maintenance and repairs starts after completion of construction and for the first year is $3 million, increasing by 2 percent per year thereafter. At an interest rate of 6 percent, what is the present worth of this project? Assume all cash flows take place at year-end. Consider the present to be the end of 2025/beginning of 2026. Assume there is no salvage value at the end of year 2070. Click the icon to view the table of compound interest factors for discrete compounding periods when i = 6%. The present worth of this project is $ million. (Round to two decimal places as needed.)
Calisto Launch Services is an independent space corporation and has been contracted to develop and launch one of two different satellites. Initial equipment will cost $620,000 for the first satellite and $680,000 for the second. Development will take 5 years at an expected cost of $150,000 per year for the first satellite; $140,000 per year for the second. The same launch vehicle can be used for either satellite and will cost $265,000 at the time of the launch 5 years from now. At the conclusion of the launch, the contracting company will pay Calisto $2.5 million for either satellite. What is the future worth of the first satellite and second satellite, use MARR of 10% per year?