ok f4 aces Required information Exercise 12-8 (Algo) Payback Period and Simple Rate of Return [LO12-1, LO12-6] [The following information applies to the questions displayed below.) 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 $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 Less operating expenses: $ 260,000 Commissions to amusement houses Insurance $ 90,000 36,000 Depreciation Maintenance Net operating incone. 40,320 50,000 216,320 $ 43,680 Time 3:14 Exercise 12-8 Part 1 (Algo) 2:38 Required: 1a. Compute the payback period associated with the new electronic games. 4:03 oje 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? 3:03