Question: I just need the ones I got wrong :) Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one


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 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product Initial investment Cont of equipment (zero salvage value) $ 280,000 $ 480,000 Annual revenues and costs: Sales revenues $ 330,000 $430,000 Variable expenses $ 152,000 $ 202,000 Depreciation expense $ 56,000 $ 96,000 Fixed out-of-pocket operating costs $ 78,000 $ 60,000 The company's discount rate is 14% 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 B is preferred. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? 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 B is preferred. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Regs Read Reg 68 Calculate the internal rate of return for each product. (Round your percentage answers to decimal place le: 0.123 should be considered as 12.3%) Product A 14.0 Product B 14.0 % Internal rate of return Retur 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 B is preferred. 6b. Based on the simple rate of return, which of the two products should Lou's division accept? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req4 Reg 5 Robo Reg 6B Reg A Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place le. 0.123 should be considered as 12.3%) Product A Product B Simple rate of retum 20.7% 17.5 X %
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