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 $425.000, have a fifteen-year useful life, and have a total salvage value of $42.500, The company estimates that annual revenues and expenses associated with the games would be as follows $ 220,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Haintenance Net operating income $ 70,000 25,000 25,500 40,000 150,500 $ 59,500 Required: ta Compute the payback period associated with the new electronic games. 1b. 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?