Nick$$s Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $$320,000,$ have a fifteen$-$year useful life, and have a total salvage value of $$32,000.$ The company estimates that annual revenues and expenses associated with the games would be as follows:

Revenues $ $230,000$

Less operating expenses:

Commissions to amusement houses $ $80,000$

Insurance $20,000$

Depreciation $19,200$

Maintenance $50,000169,200$

Net operating income $ $60,800$

Required:

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

$1$b$.$ Assume that 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?