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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 (Ron, which has exceeded 24% each of the last three years. He has computed the cost and revenue estimates for each product as follows Cost: of $330,000 515,000 Sales s370,000s470,000 168,000 218,000 $ 66,000 103,000 $ 82,000 68,000 The company's discount rate is 15%. enceClick here to view Exhibit 138-1 and Exhiblt 138-2, to determine the appropriate discount factor using tables. 1. Calculate the payback period for each product. late 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 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 rete of return, Lou Barlow would likely: Complete this question by entering your answers in the tabs below. Req 1 Req 5 Req 6A to 2 decimal Payback period

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