[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 $300,000, have an eight-year useful life, and have a total salvage value of $30,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $200,000 Less operating expenses: $60,000 30,000 Commissions to amusement houses Insurance Depreciation 33,750 35,000 Maintenance 158,750 Net operating income $ 41,250 2. Required: 1a. Compute the pay back period associated with the new electronic games. Payback Period Choose Numerator: Choose Denominator: %3D Payback Period Payback period %3D years
[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 $300,000, have an eight-year useful life, and have a total salvage value of $30,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $200,000 Less operating expenses: $60,000 30,000 Commissions to amusement houses Insurance Depreciation 33,750 35,000 Maintenance 158,750 Net operating income $ 41,250 2. Required: 1a. Compute the pay back period associated with the new electronic games. Payback Period Choose Numerator: Choose Denominator: %3D Payback Period Payback period %3D years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![[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 $300,000, have an eight-year useful life, and have a total salvage value of
$30,000. The company estimates that annual revenues and expenses associated with the games would be
as follows:
Revenues
$200,000
Less operating expenses:
$60,000
30,000
Commissions to amusement houses
Insurance
Depreciation
33,750
35,000
Maintenance
158,750
Net operating income
$ 41,250
2.
Required:
1a. Compute the pay back period associated with the new electronic games.
Payback Period
Choose Numerator:
Choose Denominator:
%3D
Payback Period
Payback period
%3D
years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe317b935-ae88-4a01-8d48-45392e2ca4d4%2F45b6bea1-30ab-449a-8fce-d4cb758fbd42%2Fi7k87zc_processed.png&w=3840&q=75)
Transcribed Image Text:[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 $300,000, have an eight-year useful life, and have a total salvage value of
$30,000. The company estimates that annual revenues and expenses associated with the games would be
as follows:
Revenues
$200,000
Less operating expenses:
$60,000
30,000
Commissions to amusement houses
Insurance
Depreciation
33,750
35,000
Maintenance
158,750
Net operating income
$ 41,250
2.
Required:
1a. Compute the pay back period associated with the new electronic games.
Payback Period
Choose Numerator:
Choose Denominator:
%3D
Payback Period
Payback period
%3D
years
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