1.A new solid waste treatment plant is to be constructed in Washington County. The initial installation will cost $40 million (M). After 10 years, minor repair and renovation (R&R) will occur at a cost of $12M will be required; after 20 years, a major R&R costing $24M will be required. The investment pattern will repeat every 20 years. Each year during the 20-year period, operating and maintenance (O&M) costs will occur. The first year, O&M costs will total $3M. Thereafter, O&M costs will increase at a compound rate of 3% per year. Based on a 3% MARR, what is the capitalized cost for the solid waste treatment plant?

2. 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 $250,000. Plan B calls for an annual payment of $20,000 plus a royalty of $4.10 per unit sold. The remaining life of the patent is 10 years. 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?