Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

All besides 6A & 6B Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products

All besides 6A & 6B
image text in transcribed
image text in transcribed
image text in transcribed
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year perlod. Hls annual pay raises are determined by his division's return on Investment (ROI), which has exceeded 21% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product B Initial investment Cost of equipment (zero salvage value) Annual revenues and costs Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 210,000 $ 290,000 $ 138,000 $ 42,000 $ 74,000 $ 420,000 $ 390,000 $ 186,000 $ 84,000 $ 54,000 The company's discount rate is 19% Click here to view Exhibit 14B-1 and Exhibit 14B-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. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 68 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product B Product A 2.71 years Payback period 2.80 years Req2 > KEIT 14 11.1 SP 16 SHINE SI SET SU DIT STE 3 TO 11 BRE TILLADELSE MED DOO HVO PALLO IWO MESO WOOOR LYDER LES HOLD DOS HERRIKO PERS TO wa TRADE HET OTOMO HIDEO 10 11 12 11 HO TO PE 6 75 032001060912 DOWNLOAD 115 105 175 2 DS 14 ORTODON GO OM OTO ORI MOTOMO 011 UM OMRON DAN D D Download DOND 000 DDDDD 090 DOO OS 03 lowon TO OS 033 Golo ON 2011 Tolono DOS tout . Douton LA DRO Desomeone C detox Din Dino Com 0046 DO DESDE em re OH OH 001 050 10 DE CE 103 OD DOG CDO DO CON CA 0103 DE DINGOLS 019 0.000 0.000000 LOCAL OS BOT OD 10 UDAD GOOD Do ter 10 11 CHOOSE 02 DIVA 0135 CA CO DIADOS DOS GRC . DIRDI DE LA COBEDO SO DET DEL DI 16 DO DULOOM 120000 00 000 DDD D DE DOM 0305101000 LDS BD 2012 . 00 OLTRE DE DONT DIT DI DE B000 LOWO USD Wood OCROSO RODEO ROKO GOODIES PO DOLORETORID CZ Toinettes what 100 NOTRE DEMOISEVO ESIDERROTRZED WYD FOD W MOTOROSO COMO TO volop 100 12 TO MIL WTS 356 SO Preto SET MOSES OSTOSO TOOTED RES KO DO 27 1000 TO DO 0 1911 1910 1909 1910 301 30271000233 ES 350 C10 LE372 37063200125 00222427 2004 2003 2002 2003 m3 3317 31 3500 320 16683 14620 1.05110110 KE PORE LEDER SCHNEIDES LOISSOS DELS SECTE ECOLORES ESTOU SEEEDS. LESEN EMUTER SOMETIDOS DESEOS DIEGO LOYZE RECIPES ISO 69115 CM LEO OCCO SITE ATSISI ASIA 1915 DORMEO MAGE DISCLOSES EOS LITERIOS SELILI DOROTETSE 2 17 16 25 15347 259 103070750 1156401543307 YE 23 TE 14. LOVOZ 21 362 303 21 60 1249 400 0 IS TO IMMEDOWY LEON LEO LILLE TEILEN WWLLLSONGWS 10 SABIESBOS E CORTES SERIES RSS CSSETTORE THWERTISSES 55016ATIVE SEMUS COLLISTONOWEMEESTHACOSTISOIRE LOS EERS DIE WOORE TE TESTED BELOW VEI OTAC GIRL OSTEOPOROZNE TORBETSGLORIETTE ROLLESPEKT DES FO SISTE SEPTES SZERSTWO TONETTES DE POGLED DEELLISSOT OPIS DIPERSIL SELEKSI TODO EL GRGCEDI VE 111 EWIGES OS DOS STRESSENCE DE REGIO CORTGESYS WOSIOWE SOSED 116 DRIE B 100 1970333242030660402 303,000 EU IR 17 16 15 14 CE 10.5 25 30 0000 000 EUR 38763 993 SISMO SLO B721000349 350 35430916501930 1920 XWE 7435RO0635010331332366 360 361 3 551153351 12 11 OT 5076 LE SIVE DEVE SE BO LE HYP TRATEGI LEO VID CASSESES DE LES ESOT WER WEVELIOSISSSS THE ONE TO CREWS GMAIL LOTTO TES WORLDWINES ALIS NG EIGT GESTO LORENZO MORENZ016 STORS OUTLE NEW MOV TOE IN ORDER SEE WEISE SILVER LEVEL TO NEL CASO IL LOWV WI WWII LAGRIMONILLO E SEKTI GOODDODOSODOL O DDISO SOLO DO RE SESSIKSGES SALE SET STE 16 SL59 2010 2 BS 145 4 LINE Present Value of nuty of S1 A1-11) EXIBIT 10-2 accounting/garnison_17e/Exhibit/1482

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental accounting principle

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

21st edition

1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587

More Books

Students also viewed these Accounting questions

Question

List two ways that economic growth is measured.

Answered: 1 week ago