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 22% 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) $ 350,000 $ 550,000 Annual revenues and costs: Sales revenues $ 390,000 $ 470,000 Variable expenses $ 178,000 $ 210,eee Depreciation expense 5.70,000 $ 110,000 Fixed out-of-pocket operating costs $ 87,000 $ 67,000 The company's discount rate is 20% Click here to view Exhibit 148-1 and Exhibit 148-2, 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 60. 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? Complete this question by entering your answers in the tabs below. Reg 1 Req2 Reg 3 Req 4 Reqs Req6A Req 6B Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place i.e. 0.123 should be considered as 12.3%) Product A Product B Simple rate of return Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req3 Req 4 Reg 5 Req 6A Req6B For each measure, identify whether Product A or Product B is preferred. Net Present Prolitability Payback Internal Rate Simple Rate of Value Index Period of Return Return Reg 1 Req 2 Req3 Req 4 Reg 5 Req 6A Req6B Based on the simple rate of return, which of the two products should Lou's division accept? OAccept Product A Accept Product B Reject both products