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 Product B $200,000 410,000 $ Initial investment Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $280,000 $3 380,000 182,000 $ 132,000 $ $ 40,000 $82,000 $ 73,000 $53,000 The company's discount rate is 18%. Click here to view Exhibit 118-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Click here to view Exhibit 118-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Payback period Product B 2.83 years 2.67 years 2. Calculate the net present value for each product. (Use the appropriate table to determine the discount factor(s).) Product A Product B $ 34,525 Net present value 3. Calculate the project profitability index for each product. (Use the a to determine the discount factor(s). Round your answers to 2 deci Product A Product B Project profitability index 4. Calculate the simple rate of return for each product. (Round percen decimal place. i.e. 0.1234 should be considered as 12.3% and use table to determine the discount factor(s).) Product A Product B Simple rate of retum 17.5% 15.4% 5a. For each measure, identify whether Product A or Product B is prefer Net Present Value Profitability Index Payback Period