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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 (ROI), which has exceeded 25% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B $ 340,000 $ 525,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 380,000 $ 172,000 $ 68,000 $ 83,000 $ 480,000 $ 225,000 $ 105,000 $ 66,000 The company's discount rate is 17%. Calculate the project profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Project profitability index

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