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5 Check my work Part 2 of 2 16.66 points eBook Het Print References Required information. [The following information applies to the questions displayed below.]
5 Check my work Part 2 of 2 16.66 points eBook Het Print References Required information. [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $680,000, have a fifteen-year useful life, and have a total salvage value of $68,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues Less operating expenses: $ 250,000 Commissions to amusement houses Insurance $ 60,000 35,000 Maintenance 40,000 70,000 Net operating income 205,800 $44,200 Depreciation 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 10%, will the games be purchased
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