Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of 5672.000. have an fifteen-year useful life, and have a total salvage value of $67,200. The company estimates that annual revenues and expenses associated with the games would be as follows: S 250 000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $90,000 36,000 20 320 50,000 216,220 43,680 Required Information Required: 1a. Compute the pay back period associated with the new electronic games. Payback Period 1 Choose Denominator Choose Numerator: Payback Period Payback period years 1b. Assume that Nick's Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games? O No 2a. Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.) Simple rate of return % 2b. If the company requires a simple rate of return of at least 5%, will the games be purchased? oo Yes No