[The following information applies to the questions displayed below.] Nicks Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $720,000, have an eight-year useful life, and have a total salvage value of $72,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 250,000 Less operating expenses: Commissions to amusement houses $ 80,000 Insurance 40,000 Depreciation 81,000 Maintenance 40,000 241,000 Net operating income $ 9,000 5.value: 0.64 pointsRequired information Required: 1a. Compute the pay back period associated with the new electronic games. 1b. Assume that Nicks Novelties, Inc., will not purchase new games unless they provide a payback period of 9 years or less. Would the company purchase the new games? Yes No ReferenceseBook & Resources WorksheetLearning Objective: 11-01 Determine the payback period for an investment. Difficulty: 1 EasyLearning Objective: 11-04 Compute the simple rate of return for an investment. Check my work 6.value: 0.64 pointsRequired information 2a. Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.) 2b. If the company requires a simple rate of return of at least 5%, will the games be purchased? No Yes