3. Calculate the project protability index for each producL (Round your answers to 2 decimal places.} Project protability index - - 4. Calculate the simple rate of return for each product. {Round percentage answerto 1 decimal place. i.e. 0.1234 should be considered as 12.3%.] |a 5a. For each measure, identify 1.Irhether Product A or Product B is preferred. Lou Badovv, a divisional manager for Sage Company, has an opportunityr to manufacture and sell one of two new products for a fiveyear period. His annual pay raises are determined by his division's return on investment {ROI}, which has exceeded 10% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: l[lost of equipment {zero salvage value} $190,000 $ 400,000 Annual revenues and costs: Sales revenues $2?0,000 $ 3?0,000 1v'ariatrle expenses $123,000 $ 1?B,000 Depreciation expense $ 33,000 $ 00,000 Fixed outofpocket operating costs 1'5 H.000 $ 52,000 The company's discount rate is WEE. Use Excel or a nancial calculator to solve anyr time value of moneyr problems. Required: 1. Calculate the payback pen'od for each product. [Round your answers to 2 decimal places] Pavback period 1year's; Evears 2. Calculate the net present value for each product. {Round answers to the nearest dollar.}