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This is all for one question. Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new
This is all for one question.
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 18% each of the last three years. He has computed the cost and revenue estimates for each product as follows: The company's discount rate is 16%. Click here to view Exhibit 148-1 and Exhibit 148-2, 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 profitability index for each product. 5. Calculate the simple rate of return for each product. 6 . 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? Calculate the payback period for each product. (Round your answers to 2 decimal place Calculate the internal rate of return for each product. (Round your percentage considered as 12.3%.) Complete this question by entering your answers in the tabs below. Calculate the profitability index for each product. (Round your answers to 2 decimal Complete this question by entering your answers in the tabs below. Calculate the simple rate of return for each product. (Round your percentage answers to considered as 12.3%.) 6b. Based on the simple rate of return, which of the two products should Lou's division acce Answer is not complete. Complete this question by entering your answers in the tabs below. For each measure, identify whether Product A or Product B is preferred. Complete this question by entering your answers in the tabs below. Based on the simple rate of return, which of the two products should Lou's division accept? \begin{tabular}{l|} \hline Accept Product A \\ \hline Accept Product B \\ \hline Reject both products \\ \hline \end{tabular} Step by Step Solution
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