1.00 points Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise a. A suitable location in a large shopping mall can be rented for $5,000 per month b. Remodeling and necessary equipment would cost $408,000. The equipment would have a 20-year life and an $20,400 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $530,000 per year Ingredients would cost 20% of sales C. d. Operating costs would include S93,000 per year for salaries, $5,800 per year for insurance, and $50,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc. of 15.5% of sales. Required: 1. Prepare a contribution format income statement that shows the expected net operating income each vear from the franchise outlet. PAUL SWANSON Contribution Format Income Statement Variable expenses: Sellng and administrative expenses 2a. Compute the simple rate of return promised by the outlet. (Round percentage answer to 1 decimal place, i.e. 0.123 should be considered as 12.3%.) rate of return 2b. If Mr Swanson requires a simple rate of return of at least 18%, should he acquire the franchise? O Yes O No 3a. Compute the payback period on the outlet. (Round your answer to 1 decimal place.) years 3b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? O Yes O No