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A manufacturer offers an inventor the choice of two contracts for the exclusive right to manufacture and market the inventor’s patented design. Plan 1 calls for an immediate single payment of $58168. Plan 2 calls for an annual payment of $1705 plus a royalty of $3.23 for each unit sold. The remaining life of the patent is 10 years. MARR is 10% per year.

What must be the uniform annual sales to make Plan 1 and Plan 2 equally attractive?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92259083

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