Required information [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 $350,000, have a fifteen-year useful life, and have a total salvage value of $35,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues Less operating expenses: $220,000 Commissions to amusement houses Insurance $ 90,000 20,000 Depreciation 21,000 Maintenance 40,000 171,000 Net operating income $ 49,000 2a. Compute the simple rate of return promised by the games 2b. If the company requires a simple rate of return of at least 12%, will the games be purchased?