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 23% 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 Product A Product B $390,000 $585,000 $420,000 $ 185,000 $ 500,000 Variable expenses Depreciation expense $ 78,000 Fixed out-of-pocket operating costs $ 90,000 $222,000 $117,000 $ 70,000 The company's discount rate is 21%. 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. Calculate the payback period for each product. (Round your answers to 2 decimal places.) Payback period Product A Product B years years Req 2 > 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 Using Excel, calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place Le. 0.123 should be considered as 12.3%.) Product A Product B Internal rate of return > Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product Product A B Profitability index For each measure, identify whether Product A or Product B is preferred. Net Present Value Profitability Index Payback Internal Rate Period of Return