Problem 13-23 (REV) Comprehensive Problem [LO13-1, LO13-2, LO13-3, LO13-5, LO13-6) 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 21% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating ProductA Product B s 210,000 420,000 $ 290, 000 390,000 138 000 186,000 $42,000 84,000 74,000 54,000 costs The company's discount rate is 19%. Click here to view Exhibit 13B-1 and Exhibit 13B-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 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 simple rate of return for each product. (Round your answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) t B Simple rate of retum Req 4 Req 6A > Complete this question by entering your answers in the tabs below Req 5 Req 6ARq 68 Req 1 Req 2 Req 3 Req 4 For each measure, identify whether Product A or Product B is preferred Net Present Profitability PaybackInternal Rate Simple Rate Period Value Index of Return of Return Req 5 Req 6B >