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 Required: 1a Compute the pay back period associated with the new electronic games. Payback Period 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 9 years or less Would the company purchase the new games? Yes No 2a. Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. Le. 0.123 should be considered as 12.3%.) Simple tale of return % 2b. If the company requires a simple rate of return of at least 11%, will the games be purchased? No Yes