Bob's Food Stop is considering installing video games in its stores. The machines cost $350,000 and have an estimated seven-year useful life. Ignore income taxes. The following projected income statement is provided: $ 100,000 Video game revenue Less expenses: Electricity, supplies, etc. Insurance Maintenance Depreciation Net income $2,000 7,000 1,000 50,000 60,000 $ 40,000 Required: 1) Bob's Food Stop would like to recoup its original investment in less than five years. Compute the payback period for the video game machine investment. Would you recommend that the machines be purchased? Why or why not? 2) Bob's Food Stop's target unadjusted rate of return is 12%. Compute the unadjusted rate of return on the original investment. Would you recommend that the machines be purchased? Why or why not