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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.

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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 24% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product B Initial investment: Cost of equipment (zero salvage value) $ 330,000 $ 515,000 Annual revenues and costs: Sales revenues $ 370,000 $ 470,000 Variable expenses $ 168,000 $ 218,000 Depreciation expense $ 66,000 $183,600 Fixed out-of-pocket operating costs $ 82,000 $ 68,000 The company's discount rate is 15% Click here to view Exhibit 128-1 and Exhibit 128-2. 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 your answers in the tabs below. Reg 1 Reg 2 Req Reg 4 Reg 5 Reg GA Reg 68 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Products Payback period years ya The company's discount rate is 15%. Click here to view Exhibit 128.1 and Exhibit 12B-2. to determin 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 6b. Based on the simple rate of return, Lou Barlow would likely Complete this question by entering your answers in the ta Reg 1 Reg 2 Reg 3 Reg 4 Reg Calculate the net present value for each product. (Round your fine Product A Product B Not present value

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