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please include math! Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a
please include math!
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 $ 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 $ 185,000 $ 78,000 $ 90,000 $ 500,000 $ 222,000 $ 117,000 $ 70,000 The company's discount rate is 21%. Calculate the internal rate of return for each product. (Round your answers to 1 decimal place i.e as 12.3%.) Product Product Step by Step Solution
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