Nicks Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $672,000, have a 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: Revenues $ 260,000 Less operating expenses: Commissions to amusement houses $ 90,000 Insurance 36,000 Depreciation 40,320 Maintenance 50,000 216,320 Net operating income $ 43,680 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 5%, will the games be purchased?