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 $70,000. Plan B calls for an annual payment of $6,000 plus a royalty of $1.80 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?