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Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one year period. His annual pay raises are determined by

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one
year period. His annual pay raises are determined by his division's return on investment (ROI), which h
three years. He has computed the cost and revenue estimates for each product as follows:
The company's discount rate is 15%.
Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor using tab
Required:
Calculate the payback period for each product.
Calculate the net present value for each product.
Calculate the internal rate of return for each product.
Calculate the project profitability index for each product.
Calculate the simple rate of return for each product.
6a. For each measure, identify whether Product A or Product B is preferred.
6 b. 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
Req 3
Calculate the net present value for each product. (Round your final answers to the nearest whole dollar an
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