8 00 Part 1 of 2 [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 $720,000, have a fifteen-year useful life, and have a total salvage value of $72,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues Less operating expenses: Commissions to amusement houses Insurance 5 points Skipped Maintenance Net operating income Depreciation $ 250,000 $ 80,000 40,000 43,200 40,000 203,200 $ 46,800 eBook Hint Print References Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, Incorporated, will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?