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 $510,000, have an eight-year useful life, and have a total salvage value of $51,000. The company estimates that annual revenues and expenses associated with the games would be as follows: $220,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance $ 70,000 25,000 57,375 40,000 192,375 Net operating income $ 27,625 value: 5.00 points Required: 1a. Compute the pay back period associated with the new electronic games. Payback Period Choose Numerator: Choose Denominator: Payback Period Investment required Annual net cash inflow Payback period $ 640,500 $ 105,000 = 6 years 1b. Assume that Nick's 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 References eBook & Resources Worksheet Learning Objective: 11-01 Determine the payback period for an investment. Difficulty: 1 Easy Learning Objective: 11-04 Compute the simple rate of return for an investment. Check my work value: 10.00 points 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%.) Simple rate of return 2b. If the company requires a simple rate of return of at least 11%, will the games be purchased? O No O Yes