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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 raises are determined by his division's return on investment (ROI), which has exceeded 20% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Products Initial investment: Cost of equipment (zero salvage value) $ 250,000 $ 460,000 Annual revenues and costs: $ 300,000 $ 400,000 Variable expenses $ 135,000 $ 190,000 Depreciation expense $50,000 $ 92,000 Fixed out-of-pocket operating costs $ 75,000 $ 55,000 Sales revenues The company's discount rate is 18%. Click here to view Exhibit 12B-1 and Exhibit 12B-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 project 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, Lou Barlow would likely: Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 6B 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 project 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, Lou Barlow would likely: Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Req 6A Req 68 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Product B Payback period years years Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req4 Reg 5 Req 6A Reg 68 Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product A Product B Net present value Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Reg 68 Calculate the internal rate of return for each product. (Round your answer to 1 decimal place le 0,23 should be considered as 12.3%) Product A Product B Internal rate of return Complete this question by entering your answers in the tabs below. Reg 1 Req2 Reg 3 Reg 4 Reg 5 Req GA Reg 6B Calculate the project profitability Index for each product. (Round your answers to 2 decimal places.) Product A Product B Project profitability index Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4 Reg 5 Req 6A Req 6B Calculate the simple rate of return for each product. (Round your answer 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 1 Reg 2 Reg 3 Reg 4 Reg 5 Req 6A Reg 6B 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 Reg 1 Reg 2 Reg 3 Req 4 Reg 5 Req 6A Reg 6B Based on the simple rate of return, Lou Barlow would likely: Accept Product A Accept Product B Reject both products