Item$333\mathrm{.}34$points eBookHint Print References Check my workCheck My Work button is now enabled Item $3$ Problem $12-23($Algo$)$ Comprehensive Problem $[$LO$12-1,$ LO$12-2,$ LO$12-3,$ LO$12-5,$ LO$12-6]$ 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$$s return on investment $($ROI$),$ which has exceeded $23\%$ each of the last three years. He computed the following cost and revenue estimates for each product: $$Product AProduct BInitial investment:$$Cost of equipment $($zero salvage value$)$$ $390,000$$ $585,000$Annual revenues and costs:$$Sales revenues$ $420,000$$ $500,000$Variable expenses$ $185,000$$ $222,000$Depreciation expense$ $78,000$$ $117,000$Fixed out$-$of$-$pocket operating costs$ $90,000$$ $70,000$ The company$$s discount rate is $21\%.$ Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables. Required: $1.$ Calculate each product$$s payback period. $2.$ Calculate each product$$s net present value. $3.$ Calculate each product$$s internal rate of return. $4.$ Calculate each product$$s profitability index. $5.$ Calculate each product$$s simple rate of return. $6$a$.$ For each measure, identify whether Product A or Product B is preferred. $6$b$.$ Based on the simple rate of return, which of the two products should Lou$$s division accept?