aw History Bookmarks Window Help E- a Q 2 O FriJun241250PM .0. ED" 0 E] Beztomheducationcom C Q) m + BE Student - camhru. a? PRM-1111- 202m M Inbox - silvia.do... m Question 5 - Qui... Paraphrasing To... 8 Existing Models". [3 Cardinal oompa... Dashboard ) oo a Quiz #6 covering Chapter 10 0 Saved Help Save 1: Exit Submit 5 Problem #2 Nick's Novelties, Inc. is considering the purchase of electronic pinball machines to place in game arcades. The machines would cost a total of $500,000, have an eight-year useful life, and have a total salvage value of $30,000. The company estimated that annual 10 revenues and expenses associated with the machines would be as follows: points Revenues $236 , 000 ' Operating expenses: Commissions to game arcades $110,000 Insurance 8,000 N Dep reciat ion 58, 750 5 : Maintenance 18,000 194,750 Net operating income M Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables. Required: 1-a. Compute the payback period. (Round your answer to 1 decimal place.) 1-b. Assume that Nick's Novelties, Inc. will not purchase new equipment unless it provides a payback period of 6 years or less. Will the company purchase the pinball machines? ssoea Safari File Edit View History Bookmarks Window Help Q 8 0 Fri Jun 24 1:50 PM ... > ezto.mheducation.com + 88 Student - cambr. PRM-1111 - 202... M Inbox - silvia.do... M Question 5 - Qui... Paraphrasing To... C Existing Models... C Cardinal Compa... Dashboard OW Quiz #6 covering Chapter 10 i Saved Help Save & Exit Submit ments 5 1-b. Assume that Nick's Novelties, Inc. will not purchase new equipment unless it provides a payback period of 6 years or less. Will the company purchase the pinball machines? Yes 10 points O No 00:54:25 2-a. Compute the simple rate of return promised by the pinball machines. (Round your answer to 1 decimal place. (i.e., 0.1234 should be considered as 12.3%).) Simple rate of return % 2-b. If the company requires a simple rate of return of at least 14%, will the pinball machines be purchased? O No Yes 3-a. If Nick's Novelties, Inc. has a discount rate of 17%, what is the NPV of this investment? (Hint. Identify the relevant costs and then 1 as Mc Graw Hill JUN 24 4 W PDF -Safari File Edit View History Bookmarks Window Help Q 8 0 Fri Jun 24 1:50 PM ... E V ezto.mheducation.com + 88 Student - cambr. PRM-1111 - 202... M Inbox - silvia.do... M Question 5 - Qui... Paraphrasing To.. C Existing Models... C Cardinal Compa... Dashboard OW Quiz #6 covering Chapter 10 i Saved Help Save & Exit Submit ments 5 2-b. If the company requires a simple rate of return of at least 14%, will the pinball machines be purchased? O No 10 points O Yes 00:54:22 3-a. If Nick's Novelties, Inc. has a discount rate of 17%, what is the NPV of this investment? (Hint. Identify the relevant costs and then perform an NPV analysis.) (Negative amount should be indicated with a minus sign. Round discount factor(s) to 3 decimal places.) Net present value 3-b. Should the company purchase the pinball machines? O No Yes Mc Graw Hill JUN PDF