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 divisions return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows:

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 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B 300,000 500,000 350,000 450,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 160,000 210,000 Piped oust or popket operating costs 80,0005 100,000 $80,000 61,000 The company's discount rate is 16% 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: Complete this question by entering your answers in the tabs below. Req 2 Req 3 Req 4 Req 5 Req 1 Req 6A Req 6B Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Product B Payback period years years Req 1 Req2> Complete this question by entering your answers in the tabs below. Req 6B Req 5 Req 6A Req 4 Req 3 Req 2 Req 1 Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product B Product A Net present value Req 1 Complete this question by entering your answers in the tabs below. Req 6B Req 5 Req 6A Req 4 Req 3 Req 2 Req 1 Calculate the project profitability index for each product. (Round your answers to 2 decimal places. Product B Product A Project profitability index KReq 3 Complete this question by entering your answers in the tabs below. Req 3 For each measure, identify whether Product A or Product B is preferred Net Present Profitability Payback Internal Rate Simple Rate of Req 2 Req 4 Req 5 Req 1 Req 6A Req 6B of ReturnRu Value Index Period Return Req 5 Req 6B > Complete this question by entering your answers in the tabs below. Req 4 Req 5 Req 3 Req 1 Req 2 Req 6A Req 6B Based on the simple rate of return, Lou Barlow would likely: OAccept Product A Accept Product B OReject both products