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Nick's Novelties, Inc. is considering the purchase of electronic pinball machines to place in game arcades. The machines woul total of $522,000, have an elght-year useful life, and have a total salvage value of $40,000. The company estimated that annu revenues and expenses associated with the machines would be as follows: $294, 250 Revenues Operating expenses: Commissions to game arcades Insurance Depreciation Maintenance Net operating income $165.ee 6,999 60, 258 18,000 249 250 $ 45,099 Click here to view Exhibit 10.1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables Required: 1-8. Compute the payback period. (Round your answer to 1 decimal place.) Payback period 1-b. Assume that Nick's Novelties, Inc. will not purchase new equipment unless it provides a payback period of 6 years or less. company purchase the pinball machines? Yes moto mm. 2-b. If the company requires a simple rate of return of at least 15%, will the pinball machines be purchased? O No 0 Yes 3-a. If Nick's Novelties, Inc. has a discount rate of 12%, what is the NPV of this Investment? (Hint identify the relevant perform an NPV analysis.) (Negative arount sluould be Indicated with a minus sign. Rourd discount factor(s) to 30 Net present value 3-b. Should the company purchase the pinball machines? Yes No Prev Next 6 of 15