Assume 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? Exercise $14-8$ Part $2($Algo$)$

$2$a$.$ Compute the simple rate of return promised by the games.

$2$ b$.$ If the company requires a simple rate of return of at least $16\%,$ will the games be purchased?

Complete this question by entering your answers in the tabs below.

Compute the simple rate of return promised by the games.

Note: Round your answer to $1$ decimal place. i$.$e$.0\mathrm{.}123$ should be considered as $12\mathrm{.}3\%.$ If the company requires a simple rate of return of at least $16\%,$ will the games be purchased?Required information

Exercise $14-8($Algo$)$ Payback Period and Simple Rate of Return $[$LO$14-1,$ LO$14-6]$

$[$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 $$365,000,$ have a fifteen$-$year useful life, and have a

total salvage value of $$36,500.$ The company estimates annual revenues and expenses associated with

the games as follows:

Exercise $14-8$ Part $1($Algo$)$

Required:

$1$a$.$ Compute the payback period associated with the new electronic games.

$1$b$.$ Assume 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?

Complete this question by entering

your answers in the tabs below.

Compute the payback period associated with the new electronic games.