Sets Ch $14$

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EXHTBIT $14$R$-2$

EXHIBIT $1418-2$

$q,$

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 $24\%$ each of the last three years. He computed the following cost and revenue estimates for each product:

$\backslash$table$[[$Initial investment:,Product A$,$Product B$],[$Cost of equipment $($zero salvage value$),$$$330,000,$$$515,000$