$[$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 $$592,000,$ have an fifteen$-$year useful life, and

have a total salvage value of $$59,200.$ The company estimates that

annual revenues and expenses associated with the games would be as

follows: Revenues $ $300,000$ Less operating expenses: Commissions to

amusement houses $ $70,000$ Insurance $66,000$ Depreciation $35,520$

Maintenance $90,000261,520$ Net operating income $ $38,480$Exercise $13-8$ Part $11$a$.$Compute the pay back period associated with the new electronic

games.$1$b$.$Assume that Nick$$s Novelties, Inc., will not purchase new games

unless they provide a payback period of five years or less. Would

the company purchase the new games?Garrison $15$e Recheck $2014-12-29,03\_03\_2015\_$QC$\_$CS$-9557$ReferenceseBook & ResourcesExpanded tableExercise $13-8$ Part $1$Check my work

$3.$value:

$10\mathrm{.}00$ pointsRequired information$$Exercise $13-8$ Part $22$a$.$Compute the simple rate of return promised by the

games.$($Round your answer to $1$ decimal place. i$.$e$.$

$0\mathrm{.}123$ should be considered as $12\mathrm{.}3\%.)2$b$.$If the company requires a simple rate of return of at least $8\%,$

will the games be purchased?