Present Value of an Aneuity of $1 in Arrears; r1[1=(1+r)1] Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a fiveyear period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 22% each of the last three years. He computed the following cost and revenue estimates for each product: The company's discount rate is 20%. Cick here to view Extubit 148-1 and Exhibit 148:2, to determine the appropriste discount factor(s) using tables Required: 1. Calculate each product's payback period. 2 Calculate each product's net present value 3. Calculate each product's internal rate of return. 4. Calculate each product's profitability index. 5. Calculate each product's simple rate of return. 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? Problem 14-23 (Algo) Comprehensive Problem [LO14-1, LO14-2, LO14-3, LO14-5, LO14-6] Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a fiveyear period. His annual pay raises are determined by his division's return on investment (ROi). which has exceeded 22% each of the last three years. He computed the following cost and revenue estimates for each product: The company's discount rate is 20% Click here to vew Exhibr 148 . 1 and to determine the appropriate discount factor(s) using tables. Required: 1. Calculate each product's payback period. 2 Calculate each product's net present value. 3. Calculate each product's internal rate of return. 4 Calculate each product's profitabilty index 5. Calculate each product's simple rate of return. 6a. For each measure, identify whether Product A or Ptoduct B is preferred 6b. Based on the simple rate of return, which of the two products should Lou's division accept? Present Value of an Aneuity of $1 in Arrears; r1[1=(1+r)1] Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a fiveyear period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 22% each of the last three years. He computed the following cost and revenue estimates for each product: The company's discount rate is 20%. Cick here to view Extubit 148-1 and Exhibit 148:2, to determine the appropriste discount factor(s) using tables Required: 1. Calculate each product's payback period. 2 Calculate each product's net present value 3. Calculate each product's internal rate of return. 4. Calculate each product's profitability index. 5. Calculate each product's simple rate of return. 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? Problem 14-23 (Algo) Comprehensive Problem [LO14-1, LO14-2, LO14-3, LO14-5, LO14-6] Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a fiveyear period. His annual pay raises are determined by his division's return on investment (ROi). which has exceeded 22% each of the last three years. He computed the following cost and revenue estimates for each product: The company's discount rate is 20% Click here to vew Exhibr 148 . 1 and to determine the appropriate discount factor(s) using tables. Required: 1. Calculate each product's payback period. 2 Calculate each product's net present value. 3. Calculate each product's internal rate of return. 4 Calculate each product's profitabilty index 5. Calculate each product's simple rate of return. 6a. For each measure, identify whether Product A or Ptoduct B is preferred 6b. Based on the simple rate of return, which of the two products should Lou's division accept
