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Exerclse $14-8($Algo$)$ Payback Perlod and SImple Rate of Return $[$LO$14-1,$ LO$14-6]$

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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 $$380,000,$ have a fifteen$-$year useful life, and have a total salvage value of $$38,000.$ The

company estimates annual revenues and expenses assoclated with the games as follows:

Exerclse $14-8$ Part $1($Algo$)$

Required:

Compute the payback perlod assoclated with the new electronic games.

$1$b$.$ Assume Nick's Noveltles, Incorporated, will not purchase new games unless they provide a payback perlod of five years or less.

Would the company purchase the new games?

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Required $1A$

Compute the payback period associated with the new electronic games.