a. A suitable location in a large shopping mall can be rented for $3,100 per month. b. Remodeling and necessary equipment would cost $294,000. The equipment would have a 20-year life and a $14,700 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $340,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $74,000 per year for salaries, $3,900 per year for insurance, and $31,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 14.5% of sales. Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. 2-a. Compute the simple rate of return promised by the outlet. 2-b. If Mr. Swanson requires a simple rate of return of at least 18 %, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 3B Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. Cash Variable expenses: The Yogurt Place, Incorporated, Contribution Format Income Statement Cost of ingredients Commissions $ 68,000 49,300 117,300 (117,300) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 3A Req 3B Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. The Yogurt Place, Incorporated, Contribution Format Income Statement Cash Variable expenses: Cost of ingredients Commissions $ 68,000 49,300 117,300 (117,300) Fixed expenses: Rent $ 37,200 Depreciation 13,965 Req 1 51,165 (168,465) Req 2A > a. A suitable location in a large shopping mall can be rented for $3,100 per month. b. Remodeling and necessary equipment would cost $294,000. The equipment would have a 20-year life and a $14,700 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $340,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $74,000 per year for salaries, $3,900 per year for insurance, and $31,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 14.5% of sales. Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. 2-a. Compute the simple rate of return promised by the outlet. 2-b. If Mr. Swanson requires a simple rate of return of at least 18 %, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 38 Compute the simple rate of return promised by the outlet. (Round your answer to 1 decimal place.) Simple rate of return % < Req 1 Req 28 > a. A suitable location in a large shopping mall can be rented for $3,100 per month. b. Remodeling and necessary equipment would cost $294,000. The equipment would have a 20-year life and a $14,700 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $340,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $74,000 per year for salaries, $3,900 per year for insurance, and $31,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 14.5% of sales. Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. 2-a. Compute the simple rate of return promised by the outlet. 2-b. If Mr. Swanson requires a simple rate of return of at least 18 %, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 3A Req 38 Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years < Req 28 Req 38 >