part b: Assume that Nicks Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?

Required information [The following information applies to the questions displayed below] Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $225,000, have a fifteen-year useful life, and have a total salvage value of $22,500. The company estimates that annual revenues and expenses associated with the games would be as follows Revenues Less operating expenses: $220,000 $70,000 Commissions to amusement houses Insurance Depreciation Maintenance 25,000 13,500 80,000 188,500 Net operating income $ 31,500 Required 1a. Compute the pay back period associated with the new electronic games 1b. Assume that Nick's Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Compute the pay back period associated with the new electronic games Payback Period Years