[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 an 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 $ 5. value: 4.00 points Required information Required: 1a. Compute the pay back period associated with the new electronic games. Payback Period 7 Choose Denominator: Choose Numerator: = Payback Period Payback period years 1b. 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? O No Yes References eBook & Resources Worksheet Learning Objective: 08-01 Determine the payback period for an investment