Concept Overviews, Exercises, Problems Soved Help Save & Exit Check my 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 five year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 19% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product Initial investment: cost of equipment (zero salvage value) $190,000 $ 400,000 Annual revenues and costs: Sales revenues $ 270,000 $ 370,000 Variable expenses $ 120,000 $178,000 Depreciation expense $ 38,000 $ 80,000 Fixed out-of-pocket operating costs $ 72,000 $ 52,000 The company's discount rate is 17% 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 6a. For each measure, identify whether Product A or Product is preferred. 66. Based on the simple rate of return, which of the two products should Lou's division accept? Complete this question by entering your answers in the tabs below. CHIBIT 128-1 Precent Value of St. 13 1 2 3 4 5 6 7 8 9 10 11 12 3 14 15 0163 5% 6 8% 993 10% 12 14% 15% 16% 19% 20 21 22 24 25 09620952 0943 09350926 0917 09090901 0.893 0.885 0877 0.870 0.862 0.855 0.8470840 0.8330826 0.820 0.80 0.806 0.800 0.925 0907 0.890 0.373 0.8570.842 0.826 0812 0.797 0783 0769 0.756 0.743 0731 0.718 0706 0.094 0683 0672 0061 0.6500640 08990864 0940 0.116 0.794 0.772 0.751 0731 0712 0.693 0675 0.058 0.641 062 0.609 0.593 0579 0:5640551 0.537 0.524 0.512 0.855 0823 0792 0.753 0735 0.708 0083 0659 0636 0.63 0.592 0.572 0.552 0534 0.516 0.499 0.42 0.467 0.451 0437 0423 0.410 0.822 0784 0.747 0.713 0.681 0.650 0.621 0593 0567 0543 05190.497 0.476 0.456 0.437 04190.4020380 03700.355 0.341 0.790 0746 0705 060606300596 05640535 0.502 0,480 0456 0.432 04100390 0.370 0352 0.335 0.319 0303 0.289 0275 0.262 0.750 0.71 0.665 0.623 0.583 0.5470513 0482 0.452 0425 0.400 0.376 0.354 0.333 0314 0.296 0.229 0263 0.21 0.235 0.222 0.210 0731 0677 0.6270582 0540 0502 0467 0.434 0.404 0.376 0351 0.37 0.305 0285 0.2660249 0233 0.21802040191 0.179 0.168 07030645 0.592 0544 0500 0.460 0.424 0391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0:194 0.180 0.167 0.155 0144 014 0.676 0614 0.558 0508 0463 0422 0.336 0352 0.322 0.295 0.270 0.247 0.227 02000191 0176 0152 0.149 0.137 0126 0.116 0.107 0650 0.585 0527 0,075 0429 0388 0.750 0.317 0.2870.261 0237 0.215 0.1950.178 0.162 01B 0135 01230112 0.103 0094 0.030 0.625 0557 0.497 0.444 0.397 0.356 0.319 0286 0.257 0231 0.200 0.187 ON 0152 0.137 0.124 0.112 0.002 0.092 008 0076 0.069 0,601 0530 0.468 04150368 0.326 0.290 0.250 0.229 0.2040182 0.145 0130 0.116 01040093 0.084 0.075 0.068 006 0.055 0.577 0.505 0.442 0.3380340 0.299 0.263 0.232 0.205 0381 0.160 0.141 01250111 0.099 0088 007 0069 0.06 0.055 0049 0.014 0555 0.481 0.417 0.362 0.315 0.275 0239 0209 0.13 0.160 0140 0.123 0008 0.095 0.084 0.01 0.065 0.057 0.051001500400035 0534 0.458 0.394 0.339 0.292 0252 0.2180198 0163 0:51 0123 0807 0.093 0.081 0.071 0.002 0.054 0.047 0042 0.035 0.032 0028 053 0436 0371 0.3170270 0231 0198 0170 0106 0125 0108 0.093 0.000 0.009 0.060 0,052 0.045 0039 0034 0030 0.025 0.023 0.494 0.446 0.350 0296 025002020480 0153 0.1300 0.095 0.081 0.069 0059 0.051 0044 0.038 0032 0.028 0.024 0.021 0.00 0.475 0.396 0.331 0.277 0232 0194 0.364 0133 0176 0.098033 0.070 0.0600051 0.013 0037 0.031 0027 0.023 0.020 0.01 0.014 0456 0377 0.312 0.250 0.2150178 0.549 0124 0904 0.087 0073 0.061 0.051 0093 0.037 0.031 0.026 0.022 0.0190016 0.014 0.012 0.439 0.359 0.294 0242 0.1990.166 01350112 0.0930077 0064 0.053 0.044 0.037 0.031 0.026 0.022 0.01 0.015 0.013 0011 0009 AZ20.302 0278 0.226 0.184 0.1500123 0101 0083 0.068 0056 0.01 0.038 0.032 0.025 0.022 0.018 0.015 0.018 0.011 0.008 0.002 0.406 0.326 0.262 0211 0.170 0138 0112 0.0910074 0.060 0.649 0.000 0.033 0.022 0.022 0018 0.015 0.012 0010 0.0090.007 0006 0390 0.310 0.247 0192 0.150 0.126 0102 0.002 0.000 0.053 0043 0.035 0.028 0023 0019 0015000 0.0100008 0.007 0.000 0.005 0.3250295 023301840106 0.110 0.092 0.021 0.059 0.047 0030 0.030 0.024 0.020 000 000 0,00 0,009 00070006 0.005 0.004 0301020102200172 01350106 00340006 0.053 0.042 0.033 0.025 0.021 001 0.01 0.01 0.009 0.007 0006 0.005 0.004 0003 0.347 0.268 0.207 0961 0.125 0.008 0.076 0000 0047 0.037 0.029 0023 0.01008 0.011 0.009 0.000 0.000 0.005 0004 0.00 0.002 0330255 0196000116 0.000 0.0090054 0042 0.033 0025 002000160012 0.0100001 0.000 0.005 0.0040003 0.002 0.002 031 0.23 0155 054 0107 0.002 0.063 0048 007 0.029 0.022 0.017 0.014 0.01 0.008 0.000 0.005 0.000 0.0000002 0.002 0.002 DJ 0231 0110131 0.099 0.075 0057 004 0.033 0.020002000050012 0009 0.007 0.005 0004 0.003 000 0000 0002 DK 6.2000100097 0.007 0.00 0.002 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.00100010001 0000 0000 0000 0000 0000 16 17 18 19 RRNNNNAR EXHIBIT 140-2 Present Value of an Annuity of 51 In Arrears: Pencas 2 3 4 1952 440 7 9 30 11 12 14 5 6 89 95 10 12 139 % 15% 569 17% 184 19% 20% 215 22 23 20 25 0.92 0.952 004 0935 09200917 09090901 0.89 0385 0.877 0.870 0.862 0855 0.847084008330826 08200800308 0.800 1386 1859 1833 1808 1780 1759 1736 1713 1690 1658 16-17 1626 1605158515661547 1528150949210 14571440 2723 2673 2624 2572 2531 247 2444 2.402 2361 2322 2.283 2.246 2210 2170 2.310 200 2.074 2042 2011 tot 3030 3546 3.465 3387 3.312 3.240 31703102 3037 29742914 2.855 2798 2743 2.690 2639 2.509 2.540 2494 2448 2406 262 43294212 4100 3.993 2390 37913696 3.605 517 3433 3.352 3274 31993.127 2058 2.991 2.920 2064 2.103 27452609 5.242 50764917 4767 4623 4355 42014 3.9983339 3.784 36853509 3.498 3410 3.726 324531672092 3070 2.951 6002 5.706 5.582 5380 5206 5033 48594712 4564 4423 4200 400 40393922 3.812170536053508 3416 3.321 3242300 6.733 61036210 5.921 520 5.535 5.335 5.10 4.908 4.7994639 4407 4344420740783954 3.837 57203019 3.51814213729 7475 7108 6,802 6515 6.247 5995 57505537 5328 5032 49464772 4007 4451 4303456340011005 1706 3.67335653403 8.111 7722 7.300 2024 5.710 6545 539 5.650 5.426 5216 5019 433 4659 4494 4339424054 1923 3.7992682 3571 8.760 3.300 7887 7499 700 6.305 64956207 5.8 5.687 5.453 5.734 5029 430 4.656 4436 4.27 417740352902 37763656 9.35 8.8638354 790 7536 7901 64 6492 6.904915600 5.421 5197 498 4793 4011 4.09 42711 4127 3.905 3851 3725 9.394 8.353 135B 7904 7482 2100 5.750 6.424 6122 5.342 5583 5.2 5.118 4910 4715 4.53343220340533912700 10 501 5.90 9.295 745 1244 2700 7307 6.902 621 6.302 0.0025.72445468 5.2295.000 4302 461 4.432 4265 4100 79623824 11110 103009712 900 BLO 3061 2006 7191 6.01 4026142 5.8475575 324 5.092 4876 467544094315 4150 L0011859 11.052 10.838 90106 0.447 8.851 782473796.944 8004 620559545 5.405536249473056417 4109 0333837 12.106 1127447793 9122 8544 3.022 7549 212072973 604757495.075 5222 4900 4775 45764.39142190503910 12059 TODO 10.121100589372 8.201 1702 7250 6340 0.40261205.818 5.534 5.27350334812460 4.419 4243 030320 14 12.085 1158 10.336 9.604 0950 5365 783073666930 6.5506198 58775.5645.346 507040034605 4.142204097342 13.590 12.402 1470 10.594 988 9.129 3512963748970256.823 6259 5929 5.6215353 5101 4.670 4.557 446042794110 3954 14.029 12.821 11.764 10800 10017 9.292 8.649 B075 2562 2102 6:607 6312 5973 5.665 5384 5127 4.091 4675 476 4292 4121 3963 14651 11032042 11061 10 201 9442 87728767655 7170 6743 6.350 00 5.0 5.40 5.10 4.909 4.590 44084302100 3970 14.857 091.300 272 10.371 9.500 383 82667713 7230 6792 6.390 6044 57235432 51674925 473 499 440 1506 15 247 13799 2.550 1146990529 9.707 89858.348 2.75 7283 6.835 6.636 60735746 5451 5102 4.9374713 5507 4310 4143 3901 15.622 19.094 12783 1654 1675 0.023 90770422 70 2330 6.073 464 0.0075.700 5.467 5195 492 454 4323 4147 2985 15.983 14.375 13003126108109929 9.161 8.498 7096 2372 6.906 6.491 6:40 5.7835.400 5.205 4.9564721 4520 4.3284151 3.900 16.33014643 13.211 1987 10.935 10.027 92373548 79334096.935 6.554 6136 57985492 5.2154964 4734 4.524 43124155 3.990 16.663 13984061237 11051 2016 9307 350279547441 6.916531 6152 5810 5502 52234970 47394528 433541573992 1694 15141 13.591 1227810150 70196 9.370 3.650 B022 7470 690 6551 6366 5.820 5.50 5.229 497504521 4337 4159 34 17.292 15 372 18765 17409 11258 10.274 9.4278.694 3,05574967006 6.5666177 5.8295.517 5235 4.979 4746 4534 030941603985 19.793 17159 15045 1333211925 10 97798951 244 7634 2105 6.647 6233 5.871 5548 5258 4997476045444347 4160 1999 16 17 10 19 20 21 23 24 26 27 20 20 30