ipped 0 rences 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 21 each of the last three years He has computed the cost and revenue estimates for each product as follows Initial investment Cost of equipment (zero salvage value) Annual revenues and costs Sales revenues Variable expenses Depreciation expense Fixed out of pocket operating costs Product A $ 270,000 $ 320,000 $ 148,000 $ 54,000 $ 77,000 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 Product B The company's discount rate is 19 Click here to view Exhibit 7B 1 and Exhibit 78B 2, to determine the appropriate discount factor using tables 4 Calculate the project profitability index for each product 5 Calculate the simple rate of return for each product $ 480,000 $ 420,000 $ 198,000 $ 96,000 $ 57,000 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 Lou Bariow, a divisional manager for Sage Company, has an opportunity to manutacture and selt one of two new products for a five year period His annual pay raises are determined by his division's return on investment (RO) which has exceeded 2m each of the last three years He has computed the cost and revenue estimates for each product as follows The company's discount rate is 19 Required 1 Calculate the payback period for each product 2 Caiculate the net present value for each product 3 Calculate the internal rate of return for each product 4 Calculate the project profitabilify 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 Lou Barlow, a divistonal manager for Sage Company, has an opportunity to manufocture and sell one of two new products for a fiveyear period His annual pay raises are defermined by his division's return on investment (Ron) which has exceedfd 21 is each of the last three years He has computed the cost and reventie estimates for each product as follows The company's discount rate is w Click here to view fxhit ze 1 and to determine the appropriate discount factor using tables Required Required 1 Calculate the payback period for each product 2 Calculate the net present value for each product 9 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 retum, Lou Barlow would likely begin tabular c c c c c c c c c c c c c c c c c c c c c c c hline 45 5x 6 b Bx n 12s ts 16x m m m m m 2n 25 251 hline 1 098 0952 0403 0936 0926 090 9909 0901 0893 0kbs OKn 000 0ns 0842 080 0833 000 6 5 akob hline 2 1866 thsy 133 1604 175 170 178 1670 1668 t64) 1620 1605 ISAS 156h 150 1409 160 100 1440 hline 3 2715 2m 26n 2624 2571 2571 2487 244 2402 2301 20 2283 2206 2210 2m4 240 2006 2074 2012 201 1907 160 hline 4 7630 3455 336 332 3240 350 3102 303 2834 2944 2355 2 2703 2690 2sin 255 2500 264 240 2804 27 hline s 4452 4329 4 212 4100 3993 3890 3m 360 3605 35 3433 3352 3274 2199 3ml 305 2991 2506 2ket 2823 216 2lon hline 6 5242 5006 494 4 62) 4486 4355 4231 3998 3289 1685 1589 358 340 3726 2205 37 1002 3020 2551 hline 7 6002 5766 5582 5369 5206 5023 4868 4m 456 4423 42 4160 4009 3sin 3812 7206 3605 3508 1486 320 364 hline 8 645 620 59n 5747 5585 5x5 5146 4969 4799 4679 4401 434 4201 40n 354 3837 3 368 301 hline 9 xcos 708 6802 655 6242 596 5759 5531 5t 4946 4m n 4 4303 450 40nt 390 785 36n hline 90 mm 7024 670 642 645 5k60 5650 54 57 50 483 4399 492 cos4 393 IPB 1SQ hline H BNe 106 7kar 49 to be 6495 6 207 5908 5687 545 5204 5000 435 8 405 437 417 4085 1902 3x 165 hline 12 9385 nes 293 7536 684 602 6 590 56 5 50 4 46 4AD 4m rast ars hline 8 9946 3 8 354 7904 7sin7 noI 6700 612 584 5580 530 4530 4062 4200 4053 190 hline H 10563 9x 9 9285 8745 824 3367 648 6608 6202 6002 5n4 a 520 5008 4802 45tt 440 4104 396 hline 15 thtas 9360 970 9xos 8sin 8061 Tfos 7m 612 584 5575 5374 500 46 445 4157 4001 1659 hline n652 torss 50105 497 130 1824 739 5974 6604 6255 5951 566t 5405 552 tsus 470 4506 4357 (18) 4000 hline 17 11226 10cm 970 922 654 8027 7549 700 679 637 6047 5789 5485 sin 4 0 4n5 4570 421 190 hline 18 12659 11690 tores 10059 93n 8201 7102 1230 6840 6457 6128 5808 5574 52m 5cm 4608 447 420 tono 2925 hline 19 1158 10306 9 1950 8065 7800 736 6508 650 5mm 5000 484 4685 440 ton hline 20 0500 11470 10sh 5129 To6) 7469 7025 660 625 5929 5608 5757 51 4800 4657 446 420 tno hline 21 14020 201 11264 son 8649 8015 7562 752 670 597 5065 534 5m 4km 465 445 ln hline 22 M4st 0160 101 01 9 7645 670 635 604 5606 54km 549 4000 4tro0 10 atio 900 hline 2 M k51 v) 03 m 103n 9500 1206 mx n200 6792 639 604 5m 543 1025 Adin 3904 hline 24 15 247 0709 0550 11469 10589 00 Hos rint 2283 6 835 644 6073 546 544t 491 470 4507 (4) hline 25 502 MoM 0783 654 06 (m) 90n 442 284 130 04C 6001 5756 548 585 c9ts 4n 4514 tan 210 hline 26 5483 A3 (en) 21 1606 m3 6906 644 6 3 4x6 4D 4500 420 452 3 as hline 2) $6300 1464 D211 H9s) poss 1002 920 700 6935 654 606 sne 542 525 4n 4584 sau 1600 hlinem n(66) Ha9a 8400 1211 ttest 10Hb 9391 1602 7604 24 6061 654 6152 sin8 5507 5m 100 As cos 7m hline 2 voint $141 usit 12278 tise whos 16 a tan0 6060 6581 5200 550 sin 45n 4x ini 39i hline 10 v292 53n 205 Q$09 1027 921 8694 1085 10 6 1001 654 (17) 550 5705 49n 476 cos ase 3m hline 1925 post 1604 wh 67i1 5sin 554 520 4(m) AS4 A) 340 hline end tabular

Question

ipped 0 rences 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 21  each of the last three years  He has computed the cost and revenue estimates for each product as follows  Initial investment  Cost of equipment (zero salvage value) Annual revenues and costs  Sales revenues Variable expenses Depreciation expense Fixed out of pocket operating costs Product A $ 270,000 $ 320,000 $ 148,000 $ 54,000 $ 77,000 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  Product B The company's discount rate is 19   Click here to view Exhibit 7B 1 and Exhibit 78B 2, to determine the appropriate discount factor using tables  4  Calculate the project profitability index for each product  5  Calculate the simple rate of return for each product  $ 480,000 $ 420,000 $ 198,000 $ 96,000 $ 57,000 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  Lou Bariow, a divisional manager for Sage Company, has an opportunity to manutacture and selt one of two new products for a five  year period His annual pay raises are determined by his division's return on investment (RO)  which has exceeded 2m  each of the last three years  He has computed the cost and revenue estimates for each product as follows The company's discount rate is 19  Required  1  Calculate the payback period for each product 2 Caiculate the net present value for each product  3 Calculate the internal rate of return for each product  4  Calculate the project profitabilify 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  Lou Barlow, a divistonal manager for Sage Company, has an opportunity to manufocture and sell one of two new products for a fiveyear period  His annual pay raises are defermined by his division's return on investment (Ron)  which has exceedfd 21 is each of the last three years  He has computed the cost and reventie estimates for each product as follows  The company's discount rate is w    Click here to view fxhit ze 1 and to determine the appropriate discount factor using tables Required  Required  1  Calculate the payback period for each product  2 Calculate the net present value for each product 9  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 retum, Lou Barlow would likely   begin tabular   c c c c c c c c c c c c c c c c c c c c c c c    hline   45   5x   6   b   Bx   n       12s   ts       16x   m     m   m   m   m   2n   25   251     hline 1   098   0952   0403   0936   0926   090   9909   0901   0893   0kbs   OKn   000     0ns   0842   080   0833     000   6 5     akob     hline 2   1866   thsy    133   1604     175   170   178   1670   1668   t64)   1620   1605   ISAS   156h   150     1409   160   100     1440     hline 3   2715   2m   26n   2624   2571   2571   2487   244   2402   2301   20   2283   2206   2210   2m4   240   2006   2074   2012   201   1907   160     hline 4    7630     3455   336   332   3240   350   3102   303   2834   2944   2355   2   2703   2690   2sin   255   2500   264   240   2804   27     hline s    4452   4329   4 212   4100   3993   3890   3m   360   3605   35   3433   3352   3274   2199   3ml   305   2991   2506   2ket   2823   216   2lon     hline 6    5242   5006   494     4 62)   4486   4355   4231     3998   3289     1685   1589   358   340   3726   2205   37   1002   3020   2551     hline 7   6002   5766   5582   5369   5206   5023   4868   4m   456   4423   42   4160   4009   3sin   3812   7206   3605   3508   1486     320   364     hline 8     645   620   59n   5747   5585   5x5   5146   4969   4799   4679   4401   434   4201   40n   354   3837   3   368     301       hline 9   xcos   708   6802   655   6242   596   5759   5531     5t   4946   4m   n   4    4303   450   40nt   390   785   36n         hline 90     mm     7024   670   642   645   5k60   5650   54   57   50   483       4399   492   cos4   393   IPB   1SQ       hline H   BNe   106   7kar   49   to   be   6495   6 207   5908   5687   545    5204   5000   435   8   405   437   417   4085   1902   3x   165     hline 12   9385   nes     293   7536     684   602   6   590   56   5   50     4   46   4AD   4m       rast   ars     hline 8   9946     3   8 354   7904   7sin7   noI   6700     612   584   5580   530         4530   4062   4200   4053   190       hline H   10563   9x 9   9285   8745   824     3367   648   6608   6202   6002   5n4   a   520   5008   4802   45tt   440     4104   396       hline 15   thtas   9360   970   9xos   8sin   8061   Tfos    7m       612   584   5575   5374   500     46    445     4157   4001   1659     hline   n652   torss   50105   497     130   1824   739   5974   6604   6255   5951   566t   5405   552   tsus   470   4506   4357   (18)   4000        hline 17     11226   10cm   970   922   654   8027   7549   700   679   637   6047   5789   5485   sin   4 0   4n5   4570     421     190     hline 18    12659   11690   tores   10059   93n     8201   7102   1230   6840   6457   6128   5808   5574   52m   5cm     4608   447   420   tono   2925     hline 19       1158    10306   9   1950   8065   7800   736   6508   650     5mm       5000   484   4685   440     ton       hline 20   0500     11470   10sh     5129     To6)   7469   7025   660   625   5929   5608   5757   51   4800   4657   446   420   tno       hline 21   14020   201   11264     son     8649   8015   7562   752     670   597   5065   534   5m   4km   465   445   ln         hline 22   M4st   0160     101   01   9       7645     670   635   604   5606   54km   549   4000   4tro0     10   atio   900     hline 2   M k51     v) 03   m   103n   9500     1206   mx   n200   6792   639   604   5m   543     1025     Adin       3904     hline 24   15 247   0709   0550   11469   10589   00   Hos     rint   2283   6 835   644   6073   546   544t     491   470   4507     (4)       hline 25   502   MoM   0783   654   06    (m)   90n   442   284   130     04C   6001   5756   548   585   c9ts   4n   4514   tan   210       hline 26   5483   A3     (en)         21     1606   m3   6906   644   6   3       4x6   4D   4500   420   452   3 as     hline 2)   $6300   1464   D211   H9s)   poss    1002   920     700     6935   654   606   sne   542   525     4n   4584   sau     1600     hlinem   n(66)   Ha9a   8400   1211   ttest   10Hb   9391   1602   7604   24    6061   654   6152   sin8   5507   5m   100     As    cos     7m     hline 2   voint   $141   usit   12278   tise   whos     16    a   tan0   6060   6581     5200   550   sin       45n   4x   ini   39i     hline 10   v292   53n   205   Q$09     1027   921   8694   1085   10 6   1001   654   (17)     550   5705   49n   476     cos   ase   3m     hline           1925   post         1604   wh     67i1   5sin   554   520   4(m)     AS4   A)     340     hline  end tabular

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