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1 Required information The following information applies to the questions displayed below) Nick's Novelties, Inc....

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Accounting

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1 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 $425.000, have a lifteen year useful ide, and have a total salvage value of $42.500. The company estimates that annual revenues and expenses associated with the games would be as follows 5220,000 $70,000 Revenues Les pertingen Comissions to houses Trance Depreciation Finance Niet operating income 40.000 160.00 $ 59,50 Required: ta Compute the payback period associated with the new electronic games Ib. Assume that Nick's Novelties, Inc. will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games

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