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: Product A Product B Initial investment: Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Cost of equipment (zero salvage value) $ 210,000 $ 420,000 $ 290,000 $ 390,000 $ 138,000 $ 186,000 $ 42,000 $ 84,000 Fixed out-of-pocket operating costs $ 74,000 $ 54,000 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. 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 Using Excel, 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 PM 022