i can not figure out required #4, project profitability index Lou Barlow,...

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Accounting

i can not figure out required #4, project profitability index image
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 ralses 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 Initial Investment: cost of equipment (zero salvage value) $ 210,000 $ 420,000 Annual revenues and costo Sales revenues $ 290,000 $ 390,000 Variable expenses $ 138,000 $ 186,000 Depreciation expense $ 42,000 $ 84,000 Fixed out-of-pocket operating costs $ 54,000 $ 74,000 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 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 2 Reg 3 Reg4 Reg 5 Reg GA Req 68 Calculate the project profitability Index for each product. (Round your answers to 2 decimal places.) Product A Product B Project profitability index

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