Answered step by step
Verified Expert Solution
Question
1 Approved Answer
! Required information Exercise 14-8 (Algo) Payback Period and Simple Rate of Return (LO14-1, LO14-6) [The following information applies to the questions displayed below.] Nick's
! Required information Exercise 14-8 (Algo) Payback Period and Simple Rate of Return (LO14-1, LO14-6) [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 $325,000, have a fifteen-year useful life, and have a total salvage value of $32,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $ 220,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $ 60,000 55,000 19,500 40,000 174,500 $ 45,500 Exercise 14-8 Part Complete this question by entering your answers in the tabs below. Req 2A Req 2B Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.) Simple rate of return % Reg 2A Req 2B >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started