(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 $304,000, have an eight-year useful life, and have a total salvage value of $30,400. The company estimates that annual revenues and expenses associated with the games would be as follows: $250,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance $90,000 54,000 34,200 30,000 208,200 Net operating income $ 41,800 value: 5.00 points Required: 1a. Compute the pay back period associated with the new electronic games. Choose Numerator: Payback Period 7 Choose Denominator: Payback Period Payback period years 2a. Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. .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 12%, will the games be purchased? Yes No