Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products fo

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Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products fo

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Lou Barlow A Divisional Manager For Sage Company Has An Opportunity To Manufacture And Sell One Of Two New Products Fo 1
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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 25% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Product B Initial investment: Cost of equipment (zero salvage value) $ 370,000 $530,000 Annual revenues and costs: Sales revenues $ 400,000 $ 510,000 Variable expenses $ 180,000 $ 250,000 Depreciation expense $ 74,000 $ 106,000 Fixed out-of-pocket operating costs $ 85,000 $ 72,000 The company's discount rate is 19% Click here to view Exhibit 128-1 and Exhibit 128-2. 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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5 Req6A Reg 68 Calculate the payback period for each product. (Round your answers to 2 decimal places.) Payback period Product A years Product B years Reg 2 >
tes 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? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Req 4 Reg 5 Reg 6A Reg 6B Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product A Product B Net present value < Reg 1 Req3 >
Hint 19%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor using tables. ferences 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? Complete this question by entering your answers in the tabs below. Req1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Req 6B Calculate the internal rate of return for each product. (Round your percentage answers to 1 decimal place le. 0.123 shou be considered as 12.3%.) Product A Product B Internal rate of retur % % < Reg 2 Reg 4 >
$ 180,000 $ 250,000 Depreciation expense $ 74,000 $ 106,000 Fixed out-of-pocket operating costs $ 85,000 $ 72,000 The company's discount rate is 19% Click here to view Exhibit 12B-1 and Exhibit 128-2. 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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reqs Req 6A Req 6B Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product A Product B Profitability Index Reg 3 Req 5 >
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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 6B Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Product A Simple rate of return Product B % % < Reg 4 Req6A >
dores. 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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req4 Reqs Reg 6A Req 6B For each measure, identify whether Product A or Product B is preferred. Net Present Profitability Payback Internal Rate Simple Rate Value Index Period of Return of Return < Req5 Req GB >
Where medication.com/Media/Connect Productory U23 EXHIBIT 128-1 Present Value of 1 ((1+3) Periods 1 2 3 T90 SEZ KOSOVO EIXO 80 068 F 5 6 9220 SWD CROESO PSOENSO 90 6 SRSO 0990 10 11 12 13 LZSO SOSO TETO INEDISKO 15 16 17 IK 19 20 21 4 54 65 75 X 9 105 114 125 135 145 159 16% 175 185 195 2056 215 224 0.962 0.952 0.913 0935 0926 0917 0.909 0.901 09 085 0877 0.870 0 262 0.8550X470 540 24% 255 0925 0.907 0.873 0337 0.842 0.526OX12 0.833 0.826 0.797 0.78 0.7 0.756 0.7430731 0.7180.7060694 0,683 04672 0661 0650 0640 0889 0.864 0840 0.16 0.794 0.772 0.751 0.731 0.7120.93 0675 0.658064104090390379 0564 055 0312 0534 0312 0255 0.823 0.792 0.763 0.35 0.70 0.600.659 0636 061305920.572 0.552 0534 0.51604990482 0.467 0.4510437 042 0410 020.784 0.742 0.713 0681 0.650) 0.621 0.59 0 5670 541 5190.497 0.4760456 0437 0.419 0.402 0312 0.79) 0.746 0286 0.3700355 0341 0.705 0.630 0.596 0.564 0.335 0.507 DANO 0456A3204410 0 0 0 0 20150319 030.29 0.2750162 0.70 0.711 ( 0452 0425 0.4000376 0154 030.3140.296 0279 0.28 0.299 023 022 0210 031 0.677 0127 0.582 0.500 0.502 046780434 0404 0376 0351 20.105 023 0.266 0.319 02130218 0.204 0.19 0179 0.16 0.00 0.645 59203440.500 0.400.424 0.910361 0333 0.24 0.23 0.23 0.22 0.2090.19410 0.167 0.155 0.144 0.114 0.676 0614 0351 O SOM 0.463 0,422 0.352 0322 0.295 0.270 0.2470227 0.208 0.19 0.16 0.162 0.19 0.17 0.125 01100107 0475 0.429 0.38 010 101170270261 022710215 0.195 0.17 0.162 0.1410135012112210 R16 0X2505570.007 0.444 0.3970356 031920.286 0257,0231 0200 TON? 16 0.15 0.13 0.1240112010200920030076 0401 0330 0.460 0415036026 0.290 02380 2290204 01820.163 01450100110 0.100 0090 0.075 0068 06 ODS 0577 0442 ONN 2.340 0.29 0.26 0.10141 0.125 111 9900 0.07510010060035 064905144 0.555 0481 0417 0.100.15022510201000100014000,12 0,10 0004 OM OSS 00570051020450040005 0354 0.45 0.1040902230232 02131 0.0016.10.141 01120107 DOO 0000400000036 00:00 0.313 0.4160371 00170 2700-231 0.19 0.1200.146 0.125 0.10 0.09100NO 000052 TONS 004 0.00 0.025 0.023 0414 0416035020396 0.250 0.212.100.153.100.111 OSOK 00000000 00001400120024 04250196 0311 0.272 0.12 0.16 0.16 0.116 COOK 00000000000017 ON 027 00000011 0456 037703120.23 0.215 0.17 0.100.1240104 000070001005100800070003600320019016 ODIG 013 0419 D2590291022 10.160.1330.112 0.0770040053 00140037 0031 0026 0022 ODIN ODOO OO 0000 0422 0.342 027 026 0.18 0.150 0.123 0.101 0056 00160038003200260022 DIN 01009 0.007 0406 0326 0262 0211 0.100.13 0.11 2009 0.074 0000 0009 0.010003300271002200182 IODIS 0012 ODIO 0,009 0.0020006 0.100.10 0.27 0.19 0.158 0.126 0.102012 0066OOS 03 0035 0.025 0.021 0010 00150013 0010 0008 0.00 0.00 0.00 0.3750205 0.23 0.184 0.146 0 116 01792 0.074 0050 0042 0038 0.030 0024 0.020 0016001 0010 0.00 0.007 0.00 0.005 0.004 0.361 0281 0.220 0,172 0.15 0.106 0.084060012 0.0330026 0.021 0.017 0.014 0011 0.009070070006 0.005 0.004 000 0347 0.265 0,207 0.161 0.125 000 000 0070017 0.0290023001800140011 00091000707006 0.005 0.00 0.003 0.000 0255 0.19 0.19 0.116 0.09 0.0690054 004200 0026 020 00160012 0.00 0.00 0.00 0.005 0004 0.000000202 0321 0.243 0.15 0.14 0.107 0.082 ODES 0037 00290022007 0014 01 000K 0006 0004 0.003 0.002 0.002 0.0002 0.30 0.231 0.174 0.11 0.099 001500570140033 0.026 002000150012 0009 0.007 0005 0.004 0.003 0.003 0.002 0.002 0.001 0.208 0.142 0.067 0.06 0.032 07022ODIS 0.008 0.005 0.00400030002 0.001 0001 0.001 0.000 0.000 0.000 10.000 IZ 990000 TOO TICO SITO 23 24 25 26 27 18 29 30 40 CEEO 006 S000 1100 000
SI SEE INOLOXOXOXOLOSSO 6060. ORYGOSTISESEISS 053LOSE 435 ENSE LASCIATLON OCTC RE 6 40 $ SOX6672XL 1968 EXHIBIT 120.2 Present Value of an Annuity of S1 in Arranca Periods 45 SS 79 XS 99 10% 13% 145 165 1 0.962 0.932 0.9430.915 09267 0917090909009303507700 033 0347 026 0.820 ORIOL 0800 175 189 204 215 225 245 255 2 1.6 1239 11.761713 160 166 167 166 165 135 156 157 158 1500 1,492 146 147 140 3 2775272 2673 225772312.657 2.442.00227361202222232246 221012144214012106202612012201 4 36203346 34657331232240.170102729742914255279142600269 1.981 1952 5 4452 45N42124100352039 270912424062162 3665123433 3:152121993127 6 5.342 3076 49174.767 43 44 105829112926264202745279 4231 4.111 3.9983784 7 6.002 5786 552 55 206 458 4712 44444424160 3,495410263.245 31670 30302951 4933123206041602423.161 N 6220 6.463 62103021 5747153151323354955 4.7924619.445? 715710 6803 17263619 3511 631562473955.759537755912 4946 4.7724.602 4451 4101 4001 037863673 10 8.11772270017024 637106418 336613 6.14 SU 5.650 343632161019 465243394192 403799362370 11 8700 R300 69512013918565450132450046 4056414741214035390370656 12 9385 REIRA 753621616514626194591505741 5.1974 1943 195 3313 13 09861934 KK 8 | | | | 33025104971543334362420 403 3912170 14 TO5699 3205 3.745 S16177162 662 60023345468529500 402 411 412 42656224 15 11:118 10.30 9.712 TO 35061 7.000 7.191 6.311 626147587135253334309249762479533541534000 16 11652 108 10.1009421282412391691416.06.20559455.03.1624954700345671400 17 12.106 111 274 10.4779,763 9.12285546 0222519172067676047 421940503910 12639 11.90 10.2 10.0599372256112017202640 64876128 5X153544327 301 4. 44194243403928 19 18.134. 120851103369604980136532892988 6550761983725584 3:16 50701048544214263360973012 20 13590 12462 11470105949818 912928514 17.963.17470256,62362925920 3.62531535.0 70 46570 42794.1103954 21 14029 12821 11.764 10.836100179292 8689 075175627.102 6687631239738 5.14 3.12269146754476 429 4121 393 22 144511316312042 11 061 10.20194428.772.176764571706243699160156 34105.149.40430241103970 23 1435 14921127210371920 X 16 177187106792316.193 604358223542510792534703101417976 24 15.207 13/799 1235071910529 971295 KELL 1723680516460733715451 5.182 4.937 4.71 4307 4.14 25 15.622 14.096 1275311654 10,67592371742 1743712 67364666075165453 5.1954721 167 26 153143751500311126 103109029 9.161112372 606 64816315.05.2064936728 19 27 16:30 14652110171003510022 0237885679417809691563146.136.95952150074320430415439 16.663 149 13406 107 108 10.1169.30774416501 656.15 SIDST 392370724157 29 16984151401339112278 11:58 10.19893370 So 021740686351 61661552055103229475 470431 422 1994 20 17.292 1332765127/40911235 1021494270357496700656 617153121523514979876 4514 4160395 19.793 17.19950613211925 10:5219:27920763471056626315753653234 4.700 43410166399 SSRSITETOVO OSLO COLLEOL1062 RSC COCO OSTI SLLOWSZESILESIAS NE TECIDIST ESETILOST NZ 01
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