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 for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 22% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Initial investment: Cost of equipment (zero salvage value) Annual revenues and conta: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs The company's discount rate is 20%. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. Product A $ 380,000 $ 410,000 $ 186,000 $ 76,000 $ 89,000 3. Calculate the profitability index for each product. 4. Calculate the simple rate of return for each product. 5a For each measure identify whether Product A or Product R is preferred Product B $575,000 $ 490,000 $ 218,000 $ 115,000 $ 70,000
Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the profitability index for each product. 4. Calculate the simple rate of return for each product. 5a. For each measure, identify whether Product A or Product B is preferred. 5b. 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 Payback period Req 3 Product A Req 4 Calculate the payback period for each product. (Round your answers to 2 decimal places.) years Product B Reg SA years Req 5B Req 2 >
1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the profitability index for each product. 4. Calculate the simple rate of return for each product. 5a. For each measure, Identify whether Product A or Product B is preferred. 5b. 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 Req 4 Req 58 Calculate the net present value for each product. (Round your final answers to the nearest whole dollar amount.) Product B Net present value Product A Req 3 < Req 1 Req SA Danu EME *** Req 3 > Ainut
2. Calculate the net present value for each product. 3. Calculate the profitability index for each product. 4. Calculate the simple rate of return for each product. 5a. For each measure, identify whether Product A or Product B is preferred. 5b. 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 Req 2 Profitability index Req 4 Product A Req 3 Calculate the profitability index for each product. (Round your answers to 2 decimal places.) Product B Req 5A <Req 2 Req 58 Req 4 >
Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the profitability Index for each product. 4. Calculate the simple rate of return for each product. 5a. For each measure, identify whether Product A or Product B is preferred. 5b. 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 Simple rate of return Req 3 Reg 4 Product A Product B % Req 5A Req 58 Calculate the simple rate of return for each product. (Round your percentage answers to 1 decimal place l.e. 0.123 should be considered as 12.3%.) Chec
Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the profitability index for each product. 4. Calculate the simple rate of return for each product. 5a. For each measure, identify whether Product A or Product B is preferred. 5b. 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 Req 2 Req 3 Req 4 Req SA For each measure, identify whether Product A or Product B is preferred. Not Present Profitability Payback Simple Rate of Value Index Period Return Bea Req 58
1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the profitability index for each product. 4. Calculate the simple rate of return for each product. 5a. For each measure, identify whether Product A or Product B is preferred. 5b. 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 Req 3 Accept Product A Accept Product B Reject both products Req 4 Req 5A Req 58 Based on the simple rate of return, which of the two products should Lou's division accept? Req 58