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 divisions return on investment (ROI), which has exceeded 22% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 380,000 $ 575,000 Annual revenues and costs: Sales revenues $ 410,000 $ 490,000 Variable expenses $ 186,000 $ 218,000 Depreciation expense $ 53,000 $ 95,000 Fixed out-of-pocket operating costs $ 89,000 $ 70,000.

a.calculate the internal rate of return for each product.

b. calculate the project profitability index for each product.

c. simple rate of return for each product. d. for each measure, identify whether product A or B is preferred. (net present value, profitability index, payback period, internal rate of return)