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 $592,000, have an eight-year useful life, and have a total salvage value of $59,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $300,000 Revenues Less operating expenses Commissions to amusement houses$70,000 Insurance eprciaiion Maintenance 66,000 66,600 90,000 292,600 Net operating income $ 7,400 Required Information [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 $592,000, have an eight-year useful life, and have a total salvage value of $59,200. The company estimates that annual revenues and expenses associated with the games would be as follows Revenues $300,000 Less operating expenses: $70,000 Commissions to amusement houses Insurance Depreciation Maintenance 66,000 66,600 90,000 292,600 Net operating income $ 7,400 Required: 1a. Compute the pay back period associated with the new electronic games. Payback Period Choose Numerator: Choose Denominator: Payback Period Payback period years 1b. Assume that Nick's Novelties, Inc., will not purchase new games unless they provide a payback petiod of 6 years or less. Would the company purchase the new games? O No Yes 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 8%, will the games be purchased? O No O Yes