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 23% each of the 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: last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Product A Product 8 Initial investment: Initial investment : of equipment (zero salvage value) $ 310,000 $ 510,e00 Cost of equipment (zero salvage value) $ 310, 060 $ 510, 600 Sales revenues al revenues and costs: s revenues Variable expenses $ 360,000 $ 460,000 $ 360,600 $ 460,009 $ 214,060 Variable expenses $ 164,060 $ 214,080 Depreciation expense $ 164,000 $ 62,000 $ 102,090 Fixed out-of-pocket operating costs $ 81,000 Depreciation exp $ 62,080 5 65,000 Fixed out- of -pocket operating costs $ 65, 090 The company's discount rate is 18% The company's discount rate is 18% . 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: Required: 1. Calculate the payback period for each product. 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 2. Calculate the net present value for each product 3. Calculate the internal rate of return for each product. 4. Calcula 3. Calculate the internal rate of return for each product. profitability index for each product. 4. Calculate the profitability index for each product. 5. Calculate the simple rate of return for each product. 5. Calculate the simple rate of return for each product. 6a. For each measure, Identify whether Product A or Product B is preferred. 6a. 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? 6b. Based on the simple rate of return, which of the two products should Lou's division accept? Answer is not complete. Answer is not complete. 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 Reg 3 Reg 4 Reg 5 Reg 6A Req 68 Req 1 Req 2 Reg 3 Req 4 Reg 5 Reg 6A Reg 68 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Calculate the net present value for each product. ( Round your final answers to the nearest whole dollar amount.) Product A Product B Product A Product B Payback period years years Net present value O Q3 req3.png W ... 88% X O Q3 REQ4.png ... 89% 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 (ROD). which has exceeded 23% each of the Lou Barlow, a divisional manager for Sage Company. has an opportunity to manufacture and sell one of two new products w products for a five- last three years. He has computed the cost and revenue estimates for each product as follows: year period. His annual pay raises are determined by his division's return on investment (ROD), which has exceeded 23% 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: Product A Cost of equipment (zero salvage value) $ 510,000 Initial investment: Product B $ 310, 090 Annual revenues and costs: of equipment (z $ 310,000 $ 510,080 Variable expenses $ 360,060 $ 460, Bee ual revenues and costs: $ 164,080 $ 214,060 Sales revenues $ 360,080 $ 460,020 Depreciation expense $ 102,060 Variable expenses $ 164,000 $ 214,080 Fixed out- of -pocket operating costs 5 65. gee Depreciation expense Fixed out-of -pocket operating costs $ 102,000 The company's discount rate is 18% The company's discount rate is 18% 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. Required: 2. Calculate the net present value for each product. 1. Calculate the payback period for each product. 3. Calculate the internal rate of return for each product 2. Calculate the net present value for each product. 4. Calculate the profitability index for each product. 3. Calculate the internal rate of return for each product. 5, Calculate the simple rate of ret 4. Calculate the profitability index for each product. e rate of return for each product. each measure, identify whether Product A or Product B is preferred. 5. Calculate the simple rate of return for each product 6b. Based on the simple rate of return, which of the two products should Lou's division accept? 6a. 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? * Answer is not complete. & Answer is not complete. complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 68 Req 1 Req 2 Req 3 Req 4 Req s Req 6A Req 68 Calculate the Internal rate of return for each product. (Round your percentage answers to 1 decimal place i.e. 0.123 should be considered as 12.3%,) Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Product A Internal rate of return Profitability index 10:09 PM