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answer 2a and b please Exercise 7-8 (Algo) Payback Period and Simple Rate of Return [LO7-1, L07-6] [The following information applies to the questions displayed
answer 2a and b please
Exercise 7-8 (Algo) Payback Period and Simple Rate of Return [LO7-1, L07-6] [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: Exercise 7-8 Part 2 (Algo) 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 purchasedStep by Step Solution
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