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Exercise 11-6 Payback Period and Simple Rate of Return [L011-1, LO11-4] IThe following information applies to the questlons displayed below Nick's Noveltles, Inc., Is consldering
Exercise 11-6 Payback Period and Simple Rate of Return [L011-1, LO11-4] IThe following information applies to the questlons displayed below Nick's Noveltles, Inc., Is consldering the purchase of new electronic games to place In lts amusement houses. The games would cost a total of S392,000, have an eight-year useful life, and have a total salvage value of $39.200. The company estimates that annual revenues and expenses assoclated with the games would be as follows: Revenues Less operating expenses: $270,000 Commisslons to amusement houses Insurance Depreclation Maintenance $60,000 52,000 44,100 60,000 216,100 Net operating income $53,900
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