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 24% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product B $ 330,000 $ 515,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 370,000 $ 168,000 $ 66,000 $ 82,000 $ 470,000 $ 218,000 $ 103,000 $ 68,000 The company's discount rate is 15%. 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: Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6A Req 6B Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A 2.75 years Product B 2.80 years Payback period Regi Reg 2 Reg 1 Rega Req3 Req3 Reg 4 Rega Reas Reg 5 ReqGA REGGE Req 6A Reg 6B Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product A $ 72,000 Product B $ 101,400 Net present value Reg 1 Reg 1 Reg 2 Reg 2 Reg 3 Reg 3 Reg 4 Req 4 Reg 5 Req5 Reg 6A Reg 6A Req 6B Reg 68 Calculate the internal rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A 23.9 Product B 20.7 Internal rate of return % % Req 1 Reg 2 Reg 3 Reg 4 Reg4 Req 5 Reg 6A Req A Reg 6B Calculate the project profitability index for each product. (Round your answers to 2 decimal places.) Product A Product Project profitability index 1.22 1.20 Reg 1 Regi Reg 2 Rega Req3 Reg 3 Reg 4 Rega Reg 5 Reas Req 6A Reg6A Reg 6B REG GB Calculate the simple rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A 16.4 Product B 14.8 % Simple rate of return % Req 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 6B For each measure, identify whether Product A or Product B is preferred. Net Present Value Product B Present Profitability Payback Rate of Internal Rate of Return Product A Index Rate of Period Simple Rate of Return Product A Product A Product A Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req 5 Reg 6A Req 6B Based on the simple rate of return, Lou Barlow would likely: O Accept Product A O Accept Product B Reject both produc