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 last three years. He has computed the cost and revenue estimates for each product as follows: Product A Products Initial investment cost of equipment (zero salvage value) $ 220,000 $ 410,000 Annual revenues and costsi Sales revenues $ 280,000 $ 380,000 Variable expenses $ 130,000 $ 182,000 Depreciation expense $ 44,000 $ 82,000 Pixed out-ot-pocket operating costs $ 73,000 $ 60,000 The company's discount rate is 14% Click here to view Exhibit 149-1 and Exhibit 14B-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. 3. Calculate the internal rate of return for each product 4. 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. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? 155 %8 PESO EISO X 6 OI Periods 45 65 79 99 105 115 125 135 14% 15% 165 175 185 19% 2095 219 225 239 249 255 1 0.96209520.96309350926. 09170909 0.01 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.8.40 0.833 0.826 0.820 0.813 | 0.806 0 800 2 0.925 0.907 0.890 0.873 0.8570842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.7180.706 0.6940.683 0.672 0.661 0.650 0.640 3 0.889 08640 840 O.R16 0.7940.772 0.750 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.59305790.564 0.551 0.537 0.524 0.512 4 0.8550823 0.1920.763 0.735 0.708 0.683 0.659 0.636 0.613 0.59205720.552 0.516 0.4990482 0467 0.451 0.437 0.423 0410 5 0822 0.784 0.747 0.713 0.681 0.650 0.621 0.5930567 0543 0.519 0497 0.4760456 0437 04190.402 0.386 0.3700355 0.341 02 6 0.290 0.746 0700666061005960564 0.535 0.507 048004560432 0.4100.390 0.370 0.3520.3350319 0.303 0.289 0.275 0.262 7 0.7000.7110.665 0.623 0.58305470 513 0 482045204250.400 0.376 035403330.3140.296 0.279 0.263 0.2490.235 0.222 0.210 0.7310677 0.627 0.582 0 540 0.302 0.467 0.4340404 0.376 0.351 0.327 0.305 0285 0.266 0.249 0.233 0218 0 204 0.191 0.179 0.168 0.7030645 0.592 0.54 0.500 0.460 0424 0.391 0.361 0.333 0.3080 2840 263 0.243 0.235 0.209 0.1940.180 0.167 0.155 0.144 0.134 0.67606140 SS 0SON 0.463 0422 0.386 0.352 0.3220 295 0.270 0.247 0.227 0.20 0.1910.176 0.162 0.149 0.137 0.126 0.116 0.107 11 0.65005850527 0.475 0429 0.3 0.150 0.117 0.287 0.261 0.2370215 0.1950.1780.162 0.148 0.13 0.1230112 0.103 0.094 0086 12 06250557049704440397 0.356 0319 0286 0.257 0.231 0.208 0.187 0.168 0.152 0.1371 0.1240.1120 1020.092 0.08 0.076 0.069 13 0001 0.530 0.4690415 0.368 0.32602900258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.025 0.068 0.061 0.055 14 0.5770 S0S0.442 0.38 0.30 0.299 0.263 0232 0.205 0.1810.160 0.141 0.125 0.11 0.009 ODRS 0078 0.069 0.062 0.055 0.0.09 0.044 15 055504304170362 0315 0.2750 219 0.209 0.183 0160 0.140 0.123 0.10800950.084 0.0740065 0.057 0.0SI 0.045 0.040 0.035 16 0.5340458 0.394 0.1990 292 0.252 0.218 0.18 0.163 0.141 0.123 0.10700930081 0.071 0.062 00540047 0.04200360032 0.028 031304160371 0.317 10 2700231 0.198 0.1700.146 0.125 0.1080093 ODNO 0.069 0.0000052 0.045 0039001400300026 0.023 IN 0494041603500 295 020 0212 0.18 0.151 0.10 0.11 0.095 0.01 0.0090.059 0.0510014 0.0100320028 0.024 0.021 0.018 19 044750 1960 0.277 022 0.194 0.1640118 0.116 0098 0.08100700,000 00510043001700310027 0.023002000170014 20 0456 0377/0.3120.250 2150.178 0.149 0.124010400870073061 0.051 0.0430037003100260022 0.019001600140012 21 0 4390 159 0 294 0.202010901640.135 0.112 000 007700640053 0044 0037003100260022 ODIN 00150013 | 0.011 0.009 22 04220.142 0271 0.27601140 1.50 0.123 0.101 0083006005600460038003200260022 | COIN 0,015 00130011 0009 0002 23 04060.326 0.262 0 1 0.100.1180 112 0091 0.0740060004900100033 0.027 00220018 0015 0012 0010 0.0090.007 0.006 24 0 1900 3100147 0.1977 0.1260 102 0.02 0.066 0.05100430015 002800210019001500100100018 0.007 0.006 0.1750.295 0.210 ON 0.146 0.116 0002 0.0740059 0.047 ODIO 00002400200016001300100,009 0.007 0.006 0.005 0.004 26 0.361 0710220010.035 0.106 DON4 0.06 0.053 0.042 0.033 0,02600210012 0.014 0011 0.0090.007 0.006 0.005 0.004 22 0170268 0207 161 0.125 00900760000047003700290021001N 00140011 0009 0.0070006 0.005 0.003 0.3330255 0.1960 1500 116002000600054 00420031 0,0260 0200016001200100.000 0.00400030002 0.006 03210 343 0.15 0.1410.1070.020610046 0005 0.00400030002 0.002 0.0070029 0.0220012 00140011 O 0.00 0005 0.004 10 LO 0231 0.174 0.1210099007500570044 0.0130026 0.0200015 0.00100020002 0002 00120009 0.007 0.005 40 0.004 0003 0.003 00020002 0.0 0.143 0.007017004600320022 OCKS 1 0.004 DIAM IMAM 21 9900 CODO SE CO INCO NO NOKTO 1100 STOO TOOD ISI Periods 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 IR 45 54 6% 75 8 91 105 11% 125 13% 144 15% 165 176 18 19% 205 21% 225 23% 245 254 0.962 0.952 0.9430935 09260917 0.90909010.893 0.885 0.877 0.870 0.862 0.855 0.8470.8008030.826 0.8200.813 0.806 0.800 186 1859 1830 1.8081.783 1759 1736 1.713 1.690 1668 1647 1.626 1.6057585 1966 1947 1528 1.5091492147414571440 2.775 2.723 2.673 2.624 25772531247 24142402 2361 23222.283 2.346 2210 2174 2.140 2.106 2.074 2042 2011 1.981 1.952 3630 3.5463465 3387331232403.1703.102 30372974291428552798 2.7432.6902.6392589 2.540 24942.44824042.362 4452432942124.100 39933.8903.7913696 3.05 3517 34333.352 3.2743.1993.127 305299129262.8642 N032.745 2.689 5.242 507649174.767 4623 4486435542314.1113.9983889 3.784 3.6853.5893.498 3410 3.326 3.245 3.1673.092 3.0202.951 6.0025.78655825.389 5.206 503348684.712456444234288 4.160 4.03939223.8123.7063.6053508341633273.2423 161 6.733 64636.21059715.74755353.335 5.146 4.968 4.799 4619 448743144.2074,078395432173.72636193518 34213.129 7.4357.106602 65156247 5.9955.7595537 53285.1324.9464.7724.60744514.303 4.16340313.905 3.786367335663.463 8.1117.722736070246.710 6418 6.145 5.8895.65054265.216 5,019 4834659 449443394.1924.0543923 3.799 3682 3571 8.760830678877499 7.139 6 805 6.495 | 6 207 5918568754535.2145.029 48364.656 4486 4.327 4.127 4035 3.902 3.776 3.656 93858.163 838479437536-161 68146.4926.1945918566054215.197 49884.7934611 4.439 4.278 4.127 39853.851 3.725 9.986 19,398853 358 7.901 74877.100 6.750 6424 6.1225.8425583 5.342 5.118 491047154533436242034,05339123.780 103631 9599 9295 X.745 8.2447.786 7.367 6.982 6.628 6.3026.0025.724 546852293.00 4802 4611 4432 4.265 4.108 3.962 3.824 11.118 10 380 9.7129.1088559 8.051 7.806 7.1916811 6462 6.1425.84755755.324509248764675448943154.1534.00 3.859 11 652 1983 10.105 9417 BURS! 13 7824 73796.9746.66.265395458685405 5.16249384.73043364.357 4 18940133887 12.166 11270 10.4779963 19.122 85K2022 75497.1206,72963736047.749 5.475522249204.7754576 43914219 4059 3910 12659 11 10 52810059 0.272756201 7.702 72506840646761285.818 5514 5.273503348124,800 4419 42434080392 14120 11.15 10.836 9.604 8950 8.365 7819 73666.98863506.1985.872 558433165.0704.8434.635 444242634,0973.942 135012462 470 10.990 99.129514796317.469 70256.623 6.259 5929 5.628 53535.101 4870 4657446042794.1103954 14029 12.821 1.760 LUMIA 1001792928619 3.0757562 E102 6687 63125.973 5665 5384 5.127 4 N91 4.67544764.292 4.121 3.961 14ST1716312142 06 10 201 9412 5.7728.176 7645.170 6.713635960115.696 5410 5.14949094.6790 4484.302 4.1303970 TOT DENY 2.102 10370 9.50 NRK 26 27IN 720 16.2926.19060145.7235412 5.16749254.70344994311 4.1371.976 052421379912310 5299.707 8.9857780720ORIS 6460757465451 5.9824937471314507 318 3981 1156309139.684 10675962390778422784373306876464 609757665.467 5.1954,9184.21 451443234147985 500143753 11.26 103109.2299161 MAR 296 2372 6.90664916.II85.7835.405.20649561.728 4520 4.124.150 1984 16.70 14643 13.11.07 1093510027 192.97 1.548794374029693565146.1365.295.4925215 4.96447444.524 43324,154 1.990 1632406 1917 IT051 TOTTO9307 3.10279842.4416.9616344015250 5.502 5.2214970 4719 4528 43354.157 1.992 1684 15.141 13.591 12278 ILIR 110.1999370 BASOB022 2470 6983 6351 6.16658205510522949754743433143374159 3.99 720215272 13.765 12.409 1 250 00274942786942055 249620036.566 6.177 5829551252254979 4.74645344.394160 1.995 19.793 17.150 15.046 13332 1.925 10.7579.719 1.951 244 763471056642623158715548 5.254.997 4.700 4544 4347 4.166 20 21 22 23 24 25 26 27 28 29 0