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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Pleas don't handwritten solution
Aline has three contracts from which to choose The first contract will require an outlay of $110.000 but will return $165,000 one year from now. The second contract requires an outlay of $210,000 and will return $300,000 one year from now. The third contract requires an outlay of $280,000 and will retum $380,500 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 second contract to the third contract, the IRR is percent. Therefore, (Type integers or decimals rounded to one decimal place as needed) percent. For the increment from the first contract to the second contract, the IRR is percent. For the increment from the should be chosen.
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
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