PROBLEM $13-23$ Comprehensive Problem LO$13-1,$ LO$13-2,$ LO$13-3,$ LO$13-5,$ LO$13-6$

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 $18\%$ each of the last three years. He has

computed the cost and revenue estimates for each product as follows:

The company's discount rate is $16\%.$