ning Enat GMODOFIL Nick's Novelties, Inc. is considering the purchase of electronic pinball machines to place in game arcades. The machines would cost a total of $420,000, have an eight-year useful life, and have a total salvage value of $40,000. The company estimated that annual revenues and expenses associated with the machines would be as follows: $250, eee Revenues Operating expenses: Commissions to game arcades Insurance Depreciation Maintenance Net operating income $120,000 7.ee 47,500 18. eee 0:15 192.5ee $ 57,5ee Click here to view Exhibit 10.1 and Exhibit 10.2. to determine the appropriate discount factor(s) using tables Required: 1-a. Compute the payback period. (Round your answer to 1 decimal place.) Payback period 4.2 years 1-b. Assume that Nick's Novelties, Inc. will not purchase new equipment unless it provides a payback period of 5 years or less. Will the company purchase the pinball machines? Yes 2-a. If Nick's Novelties, Inc. has a discount rate of 18%, what is the NPV of this investment? (Hint Identify the relevant costs and then perform an NPV analysis.) (Negative amount should be indicated with a minus sign. Round discount factor(s) to 3 decimal places.) Net present Value