Check my work 5 JOE SWANSON Income Statement 10 Deduct: Operating expenses: points eBook Print References Total operating expenses 2-a. Compute the simple rate of return promised by the outlet. (Round your answer to 2 decimal places. (i.e., 0.1234 should be considered as 12.34%).) Simple rate of return % Mc Graw Hill10 polnls eBDok Print References 2-1:. If Swanson requires a simple rate of return of at least 7.0%. should he acquire the franchise? 0 Yes O No 3-3. Compute the payback period on the outlet (Round your answer to 1 decimal place.) 3-1:. If Swanson wants a payback of four years or less, will he acquire the franchise? O Yes O No Check my work 5 Joe Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc. to dispense frozen yogurt products under the name The Yogurt Place. Swanson has assembled the following information relating to the franchise: 10 poms a. A suitable location in a large shopping mall can be rented for $5.060 per month. b. Remodelling and necessary equipment would cost $410,000. The equipment would have a 15-year life and an $11,000 salvage value. Straightline depreciation would be used. gawk c. On the basis of similar outlets elsewhere, Swanson estimated that sales would total $350,000 per year. Ingredients would cost 20% of sales. Print d. Operating costs would include $75,500 per year for salaries, $4,600 per year for insurance, and $31,300 per year for utilities. In R f addition, Swanson would have to pay a commission to The Yogurt Place of 12.5% of sales. 2 EVEI'ICE'S Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. % 4: Bras: 5 of 5 EEE Next