Required information Exercise 12-8 Payback Period and Simple Rate of Return [LO12-1, LO12-6] [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 a fifteen-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: Revenues $ 250,000
Less operating expenses: Commissions to amusement houses $ 90,000
Insurance 54,000
Depreciation 18,240
Maintenance 30,000 192,240
Net operating income $ 57,760
Exercise 12-8 Part 1
Required:
1a. Compute the payback period associated with the new electronic games.
1b. 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?

Verizon communications, inc., provides the following footnote relating to its leasing activities in its 10-k report. the aggregate minimum rental commitments under noncancelable leases for the periods shown at december 31, 2010, are as follows: years (dollars in millions) capital leases operatingleases 2011 $97 $1,898 2012 74 1,720 2013 70 1,471 2014 54 1,255 2015 42 1,012 thereafter 81 5,277 total minimum 418 $ 12,633 rental commitments less interest and (86) executory costs present value of 332 minimum lease payments less current (75) installments long-term obligation $257 at december 31, 2010 (a) confirm that verizon capitalized its capital leases using a rate of 7.4 %. (b) compute the present value of verizon's operating leases, assuming an 7.4% discount rate and rounding the remaining lease term to 3 decimal places. (use a financial calculator or excel to compute. do not round until your final answers. round each answer to the nearest whole number.)

All of the following led to the collapse of the soviet economy except a. a lack of worker incentives. c. inadequate supply of consumer goods. b. a reliance on production quotas. d. the introduction of a market economy.

Garcia industries has sales of $200,000 and accounts receivable of $18,500, and it gives its customers 25 days to pay. the industry average dso is 27 days, based on a 365-day year. if the company changes its credit and collection policy sufficiently to cause its dso to fall to the industry average, and if it earns 8.0% on any cash freed-up by this change, how would that affect its net income, assuming other things are held constant? a. $241.45b. $254.16c. $267.54d. $281.62e. $296.44