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 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) $370,000 570,000 Annual revenues and costs Sales revenues $400,000 480,000 $182,000 214,000 Variable expenses 52,000 94,000 Depreciation expense 88,000 68,000 Fixed out-of-pocket operating costs The company's discount rate is 20%. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor using tables