Required information Exercise 12-8 Payback Period and Simple Rate of Return [LO12-1, LO12-6] [ 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 $392,000, have a fifteen-year useful life, and have a total salvage value of $39,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 270, 000 Less operating expenses: Commissions to amusement houses $60, 000 Insurance 52,000 Depreciation 23, 520 Maintenance 60, 000 195, 520 Net operating income $ 74, 480 Exercise 12-8 Part 1 Required: 1a. Compute the payback 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