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 Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new 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 (ROI), 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 Product B Cost of equipment (zero salvage value) $ 310, 060 $ 510,060 Initial investment: Annual revenues and costs : Cost of equipment (zero salvage value) $ 310, 900 $ 510,090 Sales revenues $ 360,000 $ 460,060 Annual revenues and costs: Variable expenses $ 164, 080 $ 214,000 Sales revenues $ 360, 000 $ 460,090 Depreciation expense $ 62,000 $ 102,008 Variable expenses $ 164, 000 $ 214,000 Fixed out-of-pocket operating costs $ 81,000 $ 65,000 Depreciation expense $ 62, 000 $ 102,090 Fixed out-of-pocket operating costs $ 81,090 $ 65,000 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. 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. 3. Calculate the internal rate of return for each product. 5. Calculate the simple rate of return for each product. . Calculate the profitability index 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? x Answer is not complete. x 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 Req 5 Reg 6A Reg 6B Req 1 Req 2 Req 3 Req 4 Req 5 Reg 6A Req 6B Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place i.e, 0.123 should be For each measure, identify whether Product A or Product B is preferred. considered as 12.3%.) Net Profitability Payback Internal Simple Product A Product B Present Period Rate of Rate of Value Index Return Return Simple rate of return de de