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 25% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B $ 340,000 $ 525,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 380,000 $ 172,000 $ 68,000 $ 83,000 $ 480,000 $ 225,000 $ 105,000 $ 66,000 The company's discount rate is 17%. Click here to view Exhibit 7B-1 and Exhibit 7B-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 project 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, Lou Barlow would likely: Complete this question by entering vour answers in the tabs below. EXHIBIT 78-1 Present Value of $1; (1+ Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0962 0.952 0.943 0935 0.926 0917 0.909 0.901 0.893 0.885 0.877 0.870 0862 0.855 0.847 0.840 0.833 0826 0.820 0.813 0.806 0.800 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0756 0743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0640 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 4 0.855 0.823 0792 0763 0735 0708 0.683 0659 0.636 0.613 0.592 0572 0552 0.534 0.516 0.499 0.482 0.467 0.451 0.437 0.423 0.410 5 0.822 0784 0.747 0713 0.681 0.650 0.621 0593 0.567 0543 0519 0497 0.476 0.456 0437 0.419 0.402 0.386 0.370 0.355 0.341 0.328 6 0.790 0.746 0.705 0666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0370 0.352 0.335 0.319 0.303 0.289 0.275 0.262 7 0760 0711 0665 0.623 0.583 0.547 0.513 0482 0.452 0425 0.400 0.376 0354 0.333 0314 0.296 0279 0 263 0.249 0235 0.222 0210 8 0.731 0.677 0627 0582 0.540 0.502 0.467 0.434 0.404 0.376 0351 0.327 0.305 0.285 0.266 0.2490.233 0.218 0204 0191 0.179 0.168 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0144 0.134 10 0676 0.614 0.558 0.508 0.463 0.422 0.386 0,352 0.322 0295 0270 0.247 0227 0.208 0.191 0.176 0.162 0.149 0137 0.126 0.116 0.107 11 0650 0585 0.527 0475 0429 0.388 0.350 0317 0 287 0261 0237 0215 0195 0178 0.162 0148 0135 0123 0.112 0103 0.094 0.086 12 0625 0.557 0.497 0444 0.397 0.356 0.319 0.286 0257 0.231 0.208 0.187 0168 0.152 0.137 0124 01120102 0.092 0083 0.076 0069 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0061 0.055 14 0577 0.505 0.442 0388 0.340 0299 0.263 0.232 0205 0.181 0.160 0141 0.125 0.111 0.099 0.088 0.078 0069 0.062 0055 0.049 0044 15 0555 0.481 0.417 0362 0.315 0.275 0.239 0209 0183 0.160 0140 0123 0108 0.095 0084 0.074 0.065 0057 0.051 0045 0040 0035 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.1070093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 17 0513 0.436 0.371 0317 0270 0231 0198 01700146 0125 0108 0093 0080 0069 0060 0052 0045 0039 0034 0030 0026 0023 18 0.494 0.416 0350 0296 0.250 0212 0.180 0153 0.130 0111 0.095 0.081 0069 0.059 0.051 0044 0038 0032 0.028 0024 0.021 0018 19 0.475 0.396 0.331 0.277 0232 0.194 0164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 20 0456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 21 0.439 0.359 0.294 0 242 0199 0164 0135 0112 0093 0.077 0064 0.053 0044 0.037 0031 0026 0022 0.018 0015 0013 0011 0009 22 0.422 0.342 0.278 0226 0.184 0150 0.123 0101 0083 0068 0.056 0.046 0038 0032 0026 0022 0.018 0015 0013 0011 0009 0007 23 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 24 0 390 0.310 0.247 0.197 0.158 0.125 0.102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 25 0375 0295 0 233 0184 0146 0116 0092 0074 0.059 0.047 0038 0030 0024 0.020 0016 0.013 0010 0.009 0.007 0.006 0.005 0.004 26 0.361 0.281 0.220 0172 01350106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 27 0347 0.268 0.207 0161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0023 0.018 0.014 0.011 0,009 0.007 0.006 0.005 0.004 0.003 0.002 28 0 333 0 255 0196 0150 0116 0090 0.069 0054 0042 0033 0.026 0020 0016 0.012 0010 0008 0006 0.005 0.004 0003 0.002 0002 29 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 40 0208 0142 0097 0067 0046 0.032 0.022 0015 0011 0008 0.005 0.004 0003 0.002 0001 0.001 0001 0.000 0.000 0.000 0.000 0.000 ENNE Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Reg 6B Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A years Product B years Payback period Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6A Req6B 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 Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req3 Reg 4 Req 5 Req 6A Reg 6B Calculate the internal rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A Product B Internal rate of return % % Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6A Req 6B Calculate the project profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Project profitability index 19 your Labs Req 1 Req 2 Req3 Reg 4 Reg 5 Req 6A Req 6B Calculate the simple rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%) Product A % Product B % Simple rate of return Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Req 6A Reg 6B For each measure, identify whether Product A or Product B is preferred. Net Present Profitability Payback Internal Rate Simple Rate of Value Index Period of Return Return