Just answer please.

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 divisions 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 A			Product B
Initial investment:
Cost of equipment (zero salvage value)	$	280,000		$	490,000
Annual revenues and costs:
Sales revenues	$	340,000		$	440,000
Variable expenses	$	156,000		$	206,000
Depreciation expense	$	56,000		$	98,000
Fixed out-of-pocket operating costs	$	79,000		$	59,000

The companys discount rate is 15%.

Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Exhibit11b-1: http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-1.JPG

Exhibit11b-2: http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-2.JPG

Required:

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 A Product B $280,000 $ 490,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $340,000 $156,000 $ 56,000 $ 79,000 $ 440,000 $206,000 $ 98,000 $ 59,000 The company's discount rate is 15% Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables Required: 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A years Product B years Payback period 2 Calculate the net present value for each product. (Use the appropriate table to determine the discount factor(s).) Product A Product B Net present value 3. Calculate the project profitability index for each product. (Use the appropriate table to determine the discount factor(s). Round your answers to 2 decimal places.) Product A Product B Project profitability index 4. Calculate the simple rate of return for each product. (Round percentage answer to 1 decimal place. 1.e. 0.1234 should be considered as 12.3% and use the appropriate table to determine the discount factor(s).) Product A Product B Simple rate of return 5a. For each measure, identify whether Product A or Product B is preferred. Net Present Value Profitability Index Payback Period 5b. Based on the simple rate of return, Lou Barlow would likely: Accept Product A Accept Product B Reject both products