Saved 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 25% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product $ 370,000 $530,000 Initial investment Cast of equipment (zero salvage value) Annual revenues and costat Sales revenues Variable expenses Depreciation expense Tixed out-of-pocket operating costs $ 400,000 $ 180,000 $ 74,000 $85.000 5.510,000 $ 250.000 106,000 $ 72,000 The company's discount rate is 19% 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 60. For each measure, identify whether Product A or Product B is preferred. 65. 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. Reg 68 Reg 6A Reg 4 Reg 5 Reg 1 Reg 2 Reg 3 Calculate the payback period for each product. (Round your awers to 2 decimal places) of the two products should Lou's division accept? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg 3 Req 4 Reg 5 Reg 6A Req 6B Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amou Product A Product B Net present value Roq 1 Req3 > Prev 2 of 5 Next > bo. 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. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Reg 68 Calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place le. considered as 12.3%) Product A Product B Internal rate of return % 9 lould Lou's division accept? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req14 Reg 5 Req 6A Req 6B Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Profitability index UUD LILLOU LLIUWA Req 1 Req 2 Req3 Req 4 Regis Req 6A Reg 6B Calculate the simple rate of return for each product. (Round your percentage answers to 1 decim considered as 12.3%.) Product B Product A % Simple rate of retum % ( Req 4 Req6A > 15wers in the tabs below. Reg 1 Req 2 Reg 3 Req 4 Req5 Req 6A Req 6B For each measure, identify whether Product A or Product B is preferred. Not Present Value Profitability Index Payback Period Internal Rato Simple Rate of of Return Rotum Req1 Reg 2 Req3 Reg 4 Req 5 Req 6A Req 68 Based on the simple rate of return, which of the two products should Lou's division accept? Accept Product A Accept Product B Reject both products