Exam #2 Seve Howwork in Chegs Study Ch Help Save & Exit Submit 14 points eflook Problem 14-19 (Algo) Simple Rate of Return; Payback Period [LO14-1, LO14-6] Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Incorporated, 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 $4,300 per month. b. Remodeling and necessary equipment would cost $366,000. The equipment would have a 20-year life and a $18,300 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 $460,000 per year. Ingredients would cost 20% of sales d. Operating costs would include $86,000 per year for salaries, $5,100 per year for insurance, and $43,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 12.0% of sales. Required: 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 22%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Reg 1 Req 24 Req 28 Req 3A Reg 38 Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet The Yogurt Place, Incorporated 14 Complete this question by entering your answers in the tabs below. Req 1 Req 24 Req 28 Req 3A Req 38 1 Prepare a contribution format income statement that shows the expected net operating income each year from the franchise points outlet. Variable expenses The Yogurt Place, Incorporated Contribution Format Income Statement Fixed expenses Req2A > eBook References by the outlet 2-b. If Mr. Swanson requires a simple rate of return of at least 22%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of two 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 simple rate of return promised by the outlet. (Round your answer to 1 decimal place.) Simple rate of return eBook References repare 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 22%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3-b. If Mr. Swanson wants a payback of two 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 If Mr. Swanson requires a simple rate of return of at least 22%, should he acquire the franchise? OYes ONO 08:43:57 eBook 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise out 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 22%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. References 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 20 Req 38 > 1 points 03:43:41 eBook addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 12.0% 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 22%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. References Req 1 Req 2A Req 28 Req 3A Req 38 If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Yes ONO