Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- 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 20% each of the year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 20% each of the ast three years. He has computed the cost and revenue estimates for each product as follows: last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Product A Product B Cost of equipment (z $ 220, 000 3 410,000 Initial investment: Annual revenues and costs: Cost of equipment ( zero salvage value ) $ 220, 000 $ 410,000 Sales revenues $ 280,090 $ 380,090 Annual revenues and costs : Iable expenses $ 130, 000 $ 182, 090 Sales revenues $ 280, 060 380,000 Depreciation expense $ 44, 080 $ 130, 060 $ 182,000 6 73,006 $ 82,060 Variable expenses Fixed out-of-pocket operating costs 60,090 Depreciation expense $ 44, 090 $ 82,000 Fixed out- of-pocket operating costs $ 73, 080 $ 60,009 The company's discount rate is 14%. The company's discount rate is 14% Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. Required: 3. Calculate the internal rate of return for each product. 1. Calculate the payback period for each product. 4. Calculate the profitability Index for each product. 2. Calculate the net present value for each product 5. Calculate the simple rate of return for each product. 3. Calculate the internal rate of return for each product 6a. For each measure, identify whether Product A or Product B is preferred. 4. Calculate the profitability index for each product. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? 5. Calculate the simple rate of return for each product. 63. For each measure, identify whether Product A or Product B is preferred. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Reg 6A Reg 6B Based on the simple rate of return, which of the two products should Lou's division accept? Req 1 Req 2 Reg 3 Req 4 Req 5 Req 6A Req 68 Accept Product A Accept Product B For each measure, identify whether Product A or Product B is preferred. Reject both products Net Present Profitability Period Internal Rate Simple Rate of Value Payback Index of Return Return