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Problem 13-23 Comprehensive Problem [LO13-1, LO13-2, L013-3, LO13-5, LO13-6] 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 divisions return on investment (ROI), which has exceeded 17% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $180,00e 390,ee0 $ 260,00e 360,000 $ 124,00e $174,000 $ 36,00 78,000 $ 71,00e 5e,e8 The companys discount rate is 15%.

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Problem 13-23 Comprehensive Problem [LO13-1, LO13-2, L013-3, LO13-5, LO13-6] Lou Barlow, a divisional manager for Sage...
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