nep 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 Initial investment: Cost of equipent zero salvage value) $ 290,000 $490,000 Annual revenues and costs: Sales revenues $ 340,000 $ 440,000 Variable expenses $ 154,000 $206,000 Depreciation expense $ 58,000 $98,000 Fixed out-of-pocket operating costs $ 79,00 $ 59,000 The company's discount rate is 15% Click here to view Exhibit 148.1 and Exhibit 14B-2, to determine the appropriate discount factor using tables, Required: 1. Calculete 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 6. 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? Req 1 Req 2 Reg 3 Req 4 Reg 5 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 Reg 2 > Reg 1 Reg I Reg 3 Reg 4 Reg 5 Req 6A Reg 6B 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 Reg 6B Reg 6A Reg 2 Reg 4 Reg 5 Reg 1 RTG 3 Calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place le. 0.123 should be considered as 12.3%) Product A Product B % % Internal rate of retum Reg 1 Reg 2 Req3 Red 4 Req5 Reg GA Req 6B Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Profitability index Req 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 6B Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place le. 0.13 considered as 12.3%.) Product A Product B Simple rate of return % % Heferences Req 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 68 For each measure, identify whether Product A or Product B is preferred. Not Present Profitability Payback Internal Rato Simple Rate of Value Index Period of Return Return