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Nadine Chelesvig has patented her invention. She is offering a patent manufacturer two contracts for the exclusive right to manufacture and market her product. Plan
Nadine Chelesvig has patented her invention. She is offering a patent manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump payment to her of $27,000. Plan B calls for an annual payment of $800 plus a royalty of $0.40 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 15 %/year.
What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on a present worth analysis?
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