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 Product B $390,000 $585.000 Initial investment Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $420.000 $190.000 S78.000 $90.000 $500.000 $ 222.000 $ 117,000 $70,000 The company's discount rate is 21%. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Product B years Payback period years Calculate the net present value for each product. (Use the appropriate table to determine the discount factor(s).) Product Product Net present value 4. Calculate the simple rate of return for each product. (Round percentage answer to 1 decimal place. i.e. 0.1234 should be considered as 12.3% and use the appropriate table to determine the discount factor(s).) Product A Product B Simple rate of retum 5a. For each measure, identify whether Product A or Product B is preferred Net Present Value Profitability Index Payback Period 56. Based on the simple rate of return, Lou Barlow would likely: Accept Product A Accept Product B Reject both products