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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

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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 $672,000, have a fifteen year useful life, and have a total salvage value of $67,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $260,000 Revenues Less operating expenses Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $90,000 36,000 40,320 50,000 216,320 $ 43,680 2a. Compute the simple rate of return promised by the games 2b. If the company requires a simple rate of return of at least 5%, will the games be purchased? Complete this question by entering your answers in the tabs below. Reg 2A Reg 28 Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place, le 0.123 should be considered as 12.3%.) Simple rate of return Req 28 >

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