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: Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs The company's discount rate is 19% Product A Product B $ 366,800 $ 400,000 $ 74,000 $ 85,000 $ 530,000 $510,000 $ 250,000 $ 106,000 $ 72,000 $ 180,000 Click here to view Exhibit 12B-1 and Exhibit 128.2. to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product 2. Calculate the net present value for each product 3. Calculate the internal rade of return for each product. 4. Calculate the 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 return, which of the two products should Lou's division accept? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 68 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Product B Payback period years years Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 41 Req 5 Req 6A Req 68 Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product A Product B Net present value < Req 1 Req 3 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 68 Calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A Product B Internal rate of return % % < Req 2 Req 4 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 68 Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Profitability index Product A Product B < Req 3 Req 5 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 68 Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A Product B Simple rate of return % < Req 4 Req 6A > EXHIBIT 128-1 Present Value of $1;- 1 (1+r) Periods 4% 5% 6% 796 8% 9% 1 0.962 0.952 0.943 0.935 0.926 0917 10% 0.909 2 0.925 0.907 0.890 0.873 0.857 0842 0.826 3 0.889 0.864 0.840 0.816 0.731 4 0855 0.823 0.792 5 0.822 0.784 0.747 6 0.790 0.746 7 0.760 0.711 8 9 0.731 0.677 0627 0.582 0.703 0.645 0.592 0.544 10 0.676 0.614 0.558 0.508 11 0.650 0.585 0.527 0.475 12 13 14 15 16 17 18 19 20 21 22 0.422 0.342 0278 0.226 0.184 23 24 25 26 0.361 27 0347 28 0.333 29 0.321 30 0.308 40 0.208 0.231 0.142 11% 12% 13% 14% 0.901 0.893 0.885 0.877 0.812 0.797 | 0.783 | 0.769 0.794 0.772 0.751 0.712 0.693 0.675 0658 0.641 0624 0.609 0.593 0.579 0.763) 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 0.713 0.681 0.650 0621 0.593 0.567 0.343 0.519 0497 0.476 0.456 0437 0419 0402 0.705 0.666 0630 0.596 0.564 0.535 0.507 0.450 0.456 0432 0410 0.390 0370 0.352 0.335 0.665 0.623 0.583 0.547 0513 0.482 0452 0425 0.400 0.376 0.354 0.333 0314 0.296 0.279 0.263 0.249 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.205 0.191 0.176 0.162 0.149 0.137 0.429 0.388 0.350 0317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0112 0625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0231 0.208 0.187 0168 0.152 0137 0124 0112 0102 0.092 0.083 0.076 0.069 0.601 0.530 0.469 0415 0.368 0326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 0577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0205 0.181 0160 0141 0.125 0.1110099 0.055 0.078 0.069 0.062 0.055 0.049 004 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.015 0.534 0.458 0.394 0.339 0.292 0.252 0218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.10% 0.093 0.080 0.069 0.060 | 0.052 0.045 0.039 0014 0030 0.026 0.021 0494 0.416 0.350 0.296 0.250 0212 0.180 0.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 0.475 0.396 0331 0277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 0.456 0.377 0312 0.258 0215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.05: 0043 0.037 0.011 0.026 0.022 0.019 0.016 0.014 0.012) 0.439 0.359 0.294 0.242 0.199 0.164 0.135 0.112 0.093 0.077 0.064 0.053 0044 0037 0.031 0.026 0.022 0.018 0.015 0013 0.011 0.009 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0018 0.032 0.026 0.022 0.018 0015 0.013 0.011 0.009 0.007 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.015 0.015 0.012 0.010 0.009 0.007 0.006 0.390 0.310 0247 0.197 0.158 0.126 0.102 0.082 0.066 0053 0043 0035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 0.233 0.375 0.295 0.184 0.146 0.116 0092 0.074 0.059 0.047 0.035 0.030 0.024 0.020 0.007 0.016 0.013 0.010 0.009 0.006 0.005 0.004 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.033 0.053 0042 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.004 0.006 0.005 0.003 0.207 0.161 0.125 0.098 0.076 0037 0.060 0029 0.023 0.047 0.018 0.014 0.268 0.011 0.009 0.007 0.006 0.003 0.002 0.005 0.004 0.255 0.196 0.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.005 0.012 0.010 0.008 0.006 0.004 0.003 0.002 0.002 0.107 0082 0.063 0.243 0.048 0.011 0.185 0.037 0.008 0.141 0.029 0005 0.022 0.017 0.014 0.004 0.003 0.006 0.002 0.002 0.002 0.099 0.131 0.057 0.075 0.044 0.033 0.026 0.015 0.012 0.174 0.020 0.002 0.022 0.097 0.067 0.046. 0.015 0.011 0.032 0.008 0.005 0.004 0.003 0.000 0.000 15% 16% 17% 18% 12% 20% 21% 22% 23% 24% 25% 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 0.756 0.743 0731 0718 0.706 0.694 0.683 0.672 0.661 0.650 0640 0.564 0551 0.537 0.524 0512 0.467 0451 0.437 0423 0410 0.386 0.370 0.355 0.341 0328 0.319 0.303 0289 0275 0.262 0.235 0.222 0210 0.191 0.179 0.168 0.155 0.144 0.134 0.126 0.116 0.107 0.103 0.094 0.086 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.002 0.001 0.000 Present Value of an Annuity of $1 in Arrears, 1/1-((1+))) Periods 496 5% 1 0.962 0952 2 696 0.943 1.886 1859 1.833 796 0.935 1.808 11% 12% 13% 3 2.775 2.723 2.673 4 3.630 3.546 3.465 S 6 7 8 9 10 11 8.760 5306 7.887 12 13 14 15 9.385 K863 8.384 9.986 9.394 8.853 8.358 7.904 10.563 9.899 9.295 11118 10.380 9.712 16 11.652 10 838 10 106 17 12.160 11.274 10.477 9.763 18 12.659 11.690 10.828 10 050 19 20 21 22 8.772 23 24 25 26 10 810 27 16.330 14 643 13.211 11 987 10 935 28 16.663 14.898 13.406 12.137 11 051 10 116 29 16.984 15.141 13.591 12.278 11.158 30 10.198 9.370 17.292 15.372 13.765 12.409 11.258 10.274 9.427 40 19.793 17.159 15.046 13.332 11 925 10.757 9.779 8.951 8% 9% 10% 24% 25% 0.926 0.917 0909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.540 0.833 0826 0820 0813 0.806 0.300 1.783 1.759 1.736 1.711 1.690 1.668 1647 1.626 1.605 1.585 1.566 1.547 1528 1.509 1.492 1.474 1457 1.440 2.624 2.577 2.531 2487 2444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2042 2011 3.387 1981 1952 3.312 3.240 3.170 3.102 3.037 2974 2.914 2.855 4.452 2.798 2.743 2.690 2.639 2.589 2.540 2.494 2448 2.404 2.362 4.329 4212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3433 3.352 3274 3.199 3.127 3058 2.991 2.926 2.864 2.503 5.242 5.076 2745 2689 4.917 4.767 4.623 4.486 4.355 4231 4.111 3.998 3.889 3.764 3.665 3589 3.498 3410 3326 3245 6.002 3.167 3.092 3.020 2.951 5.786 5.582 5.389 5.206 5033 4868 4.712 4564 4423 4288 4:160 4.039 3.922 3.812 3.706 3.605 3.508 6733 6.463 3.416 3.327 3.242 3.161 6210 5.971 5.747 5.535 5.335 5.146 4965 4.799 4639 4487 4.344 4.207 4078 3.954 3.837 3.726 3.619 3518 7.435 3.421 3.329 7.108 6.802 6.315 6.247 5.995 5.759 5.537 5.328 5.132 4946 4.772 4.607 4451 4.303 4.163 4.031 3,905 1.756 3.673 3.566 8.111 7.722 7.360 3.463 7.024 6.710 6418 6145 5.889 5.650 5426 5216 5.019 4.659 4.494 4.339 4.192 4054 3.923 3.799 3.682 7499 3571 7.139 6.505 6495 6207 5.938 5.657 5.453 5.234 5.029 4.336 4.656 4.486 4.327 4177 4015 1902 3776 3656 7.943 7.536 7.161 6814 6492 6.194 5918 5.660 5421 5.197 4.988 4.793 4.611 4439 4.278 4.127 3.985 3.851 3.725 7.487 7.103 6.750 6424 6122 5842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4203 4.053 3912 3.780 8.745 8244 7.786 7.367 6982 6628 6.302 6002 5.724 5.468 5.229 5.008 4802 4.611 4432 4.265 4.108 3962 3824 9.108 8.559 8.061 7606 7.191 6.811 6.462 6.142 5.547 5.575 5.324 5092 4576 4675 4.499 4.315 415) 4.001 3359 9447 8.851 8313 7824 7379 6974 6604 6265 5.954 5668 5405 5.162 4938 4730 4536 4357 4.139 4033 3.887 9.122 8.544 8.022 7549 7120 6.729 6373 6047 5.749 5475 5222 1990 4.775 4376 4.391 4219 4.059 3.910 9.372 8756 8201 7.702 7250 6.840 6.467 6128 5818 5.534 5.275 013 4812 4608 4419 4.243 4.080 3.928 13.134 12.085 11.158] 10.336 9.604 8.950 8.365 7.839 7.366 6.938 6.550 6.198 5.877 5 584 5.316 5070 4.843 4.635 4.442 4.263 4097 3.942 13.590 12.462 11.470 10.594 981 91208514 7.961 7.469 7.025 6.623 6259 5929 5628 5.355 5101 4.870 4.657 4.460 4.279 4.110 3.954 14.029 12.821 11.764 10836 10.017 9292 8.649 8075 7.562 7.102 6.687 6312 5.973 5665 5.384 5.127 4.891 4.675 4476 4.292 4.121 3.963 14.451 13 163 12.042 11 061 10.201 9.442 8176 7.645 7.170 6.743 6.359 6.011 5.696 5410 5.149 4.909 4690 4.488 4.302 4130 3.970 14.857 13.489 12.303 11.272 10.371 9.580 8.883 8.266 7.718 7.230 6.792 6399 6044 5.723 5.432 5.167 4.925 4.703 4.499 4311 4.137 3.976 15.247 13.799 12 550 11 469 10.529 9.707 5985 8.348 2,784 7.283 6.835 6.434 6073 5.746 5451 5.182 4.937 4713 4.507 4.318 4.143 3.981 15.622 14.094 12.783 11.654 10.675 9.823 9077 8422 7.843 7.330 6.873 6.464 6097 5.766 5.467 5.195 4948 4721 4.514 4.323 4.147 3.985 15.983 14.375 13.003 11 826 9929 9.161 8.458 7.896 7.372 6.906 6.491 6.118 5.783 5.450 5.206 4.956 4.728 4.520 4.328 4.151 3.988 10 027 9.237 8.548 7.943 7.409 6935 6514 6.136 5.798 5.492 5.215 4.964 9.307 8602 7.984 7.441 6.961 6534 6.152 5.810 5.502 5.223 8.650 8022 7470 6.983 6.551 6166 5.820 5.510 5.229 8.694 8.055 7.496 7.003 6566 6.177 5.829 5.517 5.235 4.979 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 4831 4.734 4524 4.332 4.154 3.990 4.970. 4.739 4.528 4.335 4.157 3.992 4.975 4.743 4.531 4.337 4159 3.994 4,746 4534 4339 4.160 3.995 4.760 4.544 4347 4,166 3.999