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only 3 and 4 please Product A Product B Initial investment Cost of equipment (zero salvage value) $ 180,000 $ 390,000 Annual revenues and costs
only 3 and 4 please
Product A Product B Initial investment Cost of equipment (zero salvage value) $ 180,000 $ 390,000 Annual revenues and costs Sales revenues $ 270,000 $ 360,000 Variable expenses 5 130,000 $ 180,000 Depreciation expense $ 44,000 $ 85,000 Fixed out-of-pocket operating costs $ 80,000 $ 60,000 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. 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? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below, Reg 68 Reg 1 Ruq 2 Reg 3 Reg 4 Reqs Reg 6A Calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place ie 0,123 should be considered as 12.3%) Product 19.9 Product 16.3 Internal rate of return % Product Products $ 180,000 $ 390,000 Initial investments cost of equipment (tro salvage value) Annual revenges and costat Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 270.000 $ 130,000 $44.000 $ 80.000 $360,000 180,000 $36.000 $ 60,000 The company's discount rate is 16% Click here to view Exhibit 148-1 and Exhibit 148 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 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? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. R RrG2 Regs Reg Hea Meg A Reg 6 Calculate the profitability index for each product. (Round your answers to 2 decimal places) Product Product Probably index 0.00 001 Step by Step Solution
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