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 \($50,000.\) Plan 2 calls for an annual payment of \($2,000\) plus a royalty of \($1.00\) for each unit sold. The remaining life of the patent is 10 years. MARR is 10 percent per year.

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

b. If fewer than the number in Part a are schedule for production and sales, which plan is more attractive?