Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell...
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Accounting
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a fiveyear period. His annual pay raises are determined by his division's return on investment ROI which has exceeded each of the last three years. He has computed the cost and revenue estimates for each product as follows:
tabletableInitial investment:Cost of equipment zero salvage valueProduct AProduct BAnnual revenues and costs:,$$
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