Exercise $12-8($Algo$)$ Payback Period and Simple Rate of Return $[$LO$12-1,$ LO$12-6]$

$[$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 $$325,000,$ have a fifteen$-$year useful life, and have a total salvage value of $$32,500.$ The company estimates that annual revenues and expenses associated with the games would be as follows:

Revenues

Less operating expenses:

$$220,000$

Commissions to amusement houses

Insurance

Depreciation

Maintenance

Net operating income

$\backslash$table$[[,$$$220,000$