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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 (RON, which has exceeded 22% each of the last three years. He has computed the cost and revenue estimates for each product as follows Fred Initial in the Coat of pet (ertalace value Am revers and cost les red Variable pene Depreciation Fixed out-of-pocket perting $ 370,000 1400.000 1 100.000 174.000 10,000 3.570,000 1480,000 1 316000 111000 10.000 The company's discount rate is 20% Click here to view Exhibit 140.1 and Exhibit 1482. 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 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, which of the two products should Lou's division accept

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