Required information [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 $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $280,000 Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance 80,000 57,000 19,920 60,000 216,920 Net operating income $ 63,080 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