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 21% 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%. Required (Use Excel for 2-4): 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. Product A Product B $210,000 $ 290,000 $420,000 $ 390,000 $ 138,000 $ 186,000 $ 42,000 $ 84,000 $ 74,000 $ 54,000 3. Calculate the internal rate of return for each product. 4. Calculate the profitability index for each product. 6a. For each measure, identify whether Product A or Product B is preferred. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 6A Psimista ihn narind for much and (Daund are to decimal als < Previ 1 of 5 Next > Complete this question by entering your answers in the tabs below. ences Req 1 Req 2 Req 3 Req 4 Req 6A Calculate the payback period for each product. (Round your answers to 2 decimal places.) Payback period Product A Product B years years Req 1 Req 2 > 3:42 Complete this question by entering your answers in the tabs below. t ces Req 1 Req 2 Req 3 Req 4 Req 6A Using Excel, calculate the net present value for each product. (Round your final answers to the nearest who Product A Product B Net present value 2:43:17 Complete this question by entering your answers in the tabs below. Print rences: Req 1 Req 2 Req 3 Req 4 Req 6A Using Excel, calculate the internal rate of return for each product. (Round your percentage answers to 1 de 0.123 should be considered as 12.3%.) Product A Product B Internal rate of return % % < Req 2 Req 4 > 3:05 6a. For each measure, identify whether Product A or Product B is preferred. Complete this question by entering your answers in the tabs below. ces Req 1 Req 2 Req 3 Req 4 Req 6A Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Profitability index Product A Product B < Req 3 Req 6A > 2:51 Complete this question by entering your answers in the tabs below. ces Req 1 Req 2 Req 3 Req 4 Req 6A For each measure, identify whether Product A or Product B is preferred. Net Present Value Profitability Index Payback Period Internal Rate of Return < Req 4 Req 6A >