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 (RO), 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 Product B $380,000 $575,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues $ 410,000 $ 490,000 Variable expenses $186,000 $ 218,000 $ 76,000 115,000 $ Depreciation expense Fixed out-of-pocket operating costs $ 89,000 $69,000 The company's discount rate is 20%. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. factor(s) using tables. Required: 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product B Product A 2.81 years Payback period years 2. Calculate the net present value for each product. (Use the appropriate table to determine the discount factor(s).) Product A Product B $ 23,785 Net present value 3. Calculate the project profitability index for each product. (Use the appropriate table to determine the discount factor(s). Round your answers to 2 decimal places.) Product A Product B Project profitability index 4. Calculate the simple rate of return for each product. (Round percentage answer to 1 decimal place. i.e. 0.1234 should be considered as 12.3% and use the appropriate table to determine the discount factor(s).) Product A % Product B % Simple rate of return