Problem 13-23 Comprehensive Problem [L013-1, L013-2, LO13-3, LO13-5, L013-6] 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 ProductAProduct B Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs 280,000 480,000 330,000 430,000 152,000 202,000 $ 56,000 96,000 $ 78,000 60,000 The company's discount rate is 14% Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor using tables Requirec 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 project 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, Lou Barlow would likely: Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A P Product B Payback period years years Complete this question by entering your answers in the tabs below. Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Req 1 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 Complete this question by entering your answers in the tabs below. Req 3 Req 4 Req 5 Req 6A Req 6B Req 1 Req 2 Calculate the internal rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A Product B Internal rate of return Complete this question by entering your answers in the tabs below. Req 3 Req 5 Req 6A Req 6B Req 4 Req 1 Req 2 Calculate the project profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Project profitability index Complete this question by entering your answers in the tabs below. Req 6A Req 6B Req 1 Req 2 Req 3 Calculate the simple rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A Product B Simple rate of return Complete this question by entering your answers in the tabs below. Req 3 Req 4 Req 5 Req 6A Req 6B Req 1 Req 2 For each measure, identify whether Product A or Product B is preferred. Net Present Profitability Payback Internal Rate Simple Rate of Period of Return Return Value Index Complete this question by entering your answers in the tabs below. Req 2 Req 3 Req 4 Req 5 Req 6A Req 6B Req 1 Based on the simple rate of return, Lou Barlow would likely OAccept Product A OAccept Product B OReject both products