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. He has computed the cost and revenue estimates for each product as follows: Product A Product B Cost of equipment (zero salvage value) $ 280,000 $ 480,000 Initial investment: Annual revenues and costs: Sales revenues Variable expenses Depreciation expense $ 330,000 $ 430,000 $ 152,000 $ 202,000 $ 56,000 $ 96,000 60,000 Fixed out-of-pocket operating costs $ 78,000 $ The company's discount rate is 14%. Click here to view Exhibit 14B-1 and Exhibit 148-2. to determine the appropriate discount factor using tables. This is a great review problem that reinforces the individual concepts covered using a comprehensive example. To answer the questions, you must first calculate the annual net cash inflows as follows: Sales revenue minus variable expenses minus fixed out-of-pocket operating costs. Then you will calculate the following: payback period (even flows), net present value (NPV), internal rate of return (IRR) and profitability index. Required: 1. Calculate the payback period for each product. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3. Req 4 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Payback period Product A Product B years years 4. Calculate the profitability index for each product. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product A Product B Net present value < Req 1 Req 3 > Req 1 Req 2 Req 3 Req 4 Calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place l.e. 0.123 st considered as 12.3%.) Product A Product B Internal rate of return < Req 2 Req 4 > Req 1 Req 2 Req 3 Req 4 Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Profitability index Product A Product B < Req 3 Req>