Question: what is the net present value? what is the internal rate of return? what is the project profitability index? what is the simple rate of
2) what is the net present value? 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 21% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product B $ 270,000 $ 480, Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $ 32e,eee $ 148,eee $ 54,eee $ 77,eee $ 420,000 $198.000 $ 96,eee $ 57,eee The company's discount rate is 19% Click here to view Exhibit 7B-1 and Exhibit 78-2. 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 project 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, Lou Barlow would likely Complete this question by entering your answers in the tabs below. Reg 1 Reg 3 Reg 2 Reg4 Reg 5 Reg 68 Req6A Calculate the net present value for each product. (Round your final answers to the nearest whole Product Product B Not present value
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