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 25% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product B $340,000 $540,000 Initial investment Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $390,000 $175,000 $ 48,000 $ 84,000 $ 490,000 $226,000 $90,000 $ 68,000 The company's discount rate is 18% Click here to view Exhibit 138.1 and Exhibit 133-2to determine the appropriate discount factor using tables Required: 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.) Payback period Product Product B years 123403 years) 2. Calculate the net present value for each product. (Round discount factor(s) to 3 decimal places.) Product A Product B Not present value 3 Calculate the internal rate of return for each product. (Round percentage answer to 1 decimal place. Le. 0.1234 should be considered as 12.3% and Round discount factor(s) to 3 decimal places.) Product Product B Internal rate of return 4. Calculate the project profitability index for each product. (Round discount factor(s) to 3 decimal places. Round your answers to 2 decimal places.) Product Product B Project profitability index 5. Calculate the simple rate of return for each product. (Round percentage answer to 1 decimal place. 1.e. 0.1234 should be considered as 12.3%.) Product Product B Simple rate of return 6a. For each measure, identify whether Product A or Product B is preferred. Net Present Value Profitability Index Payback Period Internal Rate of Return 6b. Based on the simple rate of return. Lou Barlow would likely Accept Product A Accept Product B Reject both products