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6 parts for one question thank you Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two
6 parts for one question thank you
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay ralses are determined by his division's return on investment (ROI), which has exceeded 25% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product a Products $ 340,000 $ 525,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs Sales revenues Variable expenses Depreciation expense Pixed out-of-pocket operating costs $ 30,000 $ 172,000 $ 68,000 $ 83,000 $ 480,000 $225,000 $ 105,000 $ 66,000 . nes The company's discount rate is 17% Click here to view Exhibit 148.1 and Exhibit 143-2. to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each product. 4. Calculate the profitability Index for each product 5. Calculate the simple rate of return for each product. 6a. For each measure, Identify whether Product A or Product B is preferred 66. Based on the simple rate of return, which of the two products should Lou's division accept? 6b. Based on Complete this question by entering your answers in the tabs below. Reg 6B Reg 1 Reg 2 Reg 3 Reg 5 Req 6A Reg 4 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product B Product A years Payback period years Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req 5 Req 6A Req 6B Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product Product B Net present value Rog1 Reg 3 > Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req 4 Reg 5 Reg 6A Req 6B Calculate the Internal rate of return for each product. (Round your percentage answers to 1 decimal place le. 0.123 should be considered as 12.3%) Product A Product B Internal rate of retum % Req 5 Req 6A Req 6B Reg 4 Req 1 Reg 2 Reg 3 Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Profitability index Complete this question by entering your answers in the tabs below. Req 6A Reg 6B Reg 4 Reg 1 Reg 2 Reg 3 Reqs Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place le. 0.123 should be considered as 12.3%.) Product A Product B Simple rate of retum Complete this question by entering your answers in the tabs below. Reg 5 Req 6A Req 6B Reg 4 Req 1 Reg 2 Reg 3 For each measure, identify whether Product A or Product B is preferred. Net Present Value Profitability Index Payback Period Internal Rate Simple Rate of of Return Return Step by Step Solution
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