Required information Exercise 14-8 (Static) Payback Period and Simple Rate of Return [LO14-1, LO14-6] [The foiiowr'ng information appiies 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 $300,000. have an eightryear useful life, and have a total salvage value of $20,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 299,600 Less operating expenses: Commissions to amusement houses $ 188,688 Insurance 7,699 Depreciation 35,666 Maintenance 18,688 1681698 Net operating income $ 11.81600 Exercise 14-8 Part 1 (Static) Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, incorporated, will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games