Payback Period and Simple Rate of Return [D L05, 2 LOG] Jamieson Enterprises is considering the development of a go-kart track at an estimated total cost of $680,000. The go-karts would have a $50,000 salvage value at the end of their 10-year useful life. Estimated revenues and costs on an annual basis would be as follows: Ticket revenues $380,000 Less operating expenses: Maintenance and utilities $ 71,000 Salaries 130,000 Depreciation* 63,000 Insurance 43,000 Total operating expenses 307,000 Operating income $ 73.000 *($680,000 - $50,000) + 10 Required: Ignore income taxes. 1. Jamieson Enterprises will not proceed with development of the go-kart track unless the payback period is less than six years. Should they proceed? 2. Compute the simple rate of return for the go-kart track. If Jamieson Enterprises requires a simple rate of return of at least 10%, does the go-kart track meet this criterion