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 divisions return on investment (ROI), which has exceeded 23% each of the last three years. He computed the following cost and revenue estimates for each product:

	Product A	Product B
Initial investment:
Cost of equipment (zero salvage value)	$ 290,000	$ 490,000
Annual revenues and costs:
Sales revenues	$ 340,000	$ 440,000
Variable expenses	$ 154,000	$ 206,000
Depreciation expense	$ 58,000	$ 98,000
Fixed out-of-pocket operating costs	$ 79,000	$ 59,000

The companys discount rate is 15%.

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.

Required:

2Calculate each products net present value.

Calculate each products internal rate of return.

. Calculate each products profitability index.

PLEASE SHOW WORK