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 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs 250,000 460,000 300,000 400,000 $ 135,000 190,000 $ 50,000 92,000 $ 75,000 55,000 The company's discount rate is 18%. Click here to view Exhibit 13B-1 and Exhibit 13B-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: Req 1 Req 3 Req 4 Req 6B Req 2 Req 5 Req 6A Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Product B Payback period years years Req 5 Req 4 Req 3 Req 2 Req 1 Calculate the net present value for each product. (Round your final answers Product B Product A Net present value Req 5 Req 4 Req 3 Req 2 Req 1 Calculate the internal rate of return for each product. (Round your answers as 12.3%.) Product B Product A Internal rate of return Req 5 Req 3 Reni 1 Req 2 Req 1 Calculate the project profitability index for each product. (Round your ans Product A Product B Project profitability index Req 5 Req 4 Req 3 Req 2 Req 1 Calculate the simple rate of return for each product. (Round your answers as 12.3%.) Product B Product A Simple rate of return Req 6A Req 5 Req 4 Req 3 Req 2 Req 1 For each measure, identify whether Product A or Product B is preferred Net Present Profitability Payback Internal Rate Simple Rate of Return of Return Period Index Value Req 6B Req 4 Req 5 Req 3 Req 1 Req 2 Based on the simple rate of return, Lou Barlow would likely: Accept Product A OAccept Product B OReject both products