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Traya, a divisional manager for the Sage company, has the chance to produce and market one of the two new products for a period of
Traya, a divisional manager for the Sage company, has the chance to produce and market one of the two new products for a period of five years. His division's return on investment ROI which has exceeded each of the last three years, is what determines how much he is paid annually. For each product, he has calculated the cost and revenue projections. Particular Product A Product B Initial Investment: Cost of equipment zero salvage value $ $ Annual Revenues and Cost: Sales revenues $ $ Variable expenses $ $ Depreciation Expenses $ $ Fixed out of pocket operating costs $ $ The companys discount rate is Required: Calculate the Payback period for: a Product A year. b Product B year.
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