Exercises/Problems Help Save & Exit Submit Check my work 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 $3,700 per month b. Remodeling and necessary equipment would cost $330.000 The a necessary equipment would cost $330,000. The equipment would have a 20-year life and a $16.500 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 $400,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $80,000 per year for salaries, $4,500 per year for insurance, and $37,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 12.5% 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 20%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-5. 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. Prev 4 of 8 B Next > N OTE 125 ter 13 Exercises/Problems 6 Saved Help Save & Exit Submit Check my work keq i keq ZA Keq 25 Prepare a contribution format Income statement that shows the expected net operating Income each year from the franchise outlet. The Yogurt Place, Inc. Contribution Format Income Statement Variable expenses JUU Fixed expenses 8 !! Next > REYUNG 1. Prepare a contribution format Income statement that shows the expected net operating Income each franchise outlet 2-a. Compute the simple rate of return promised by the outlet 2-5. Mr. Swanson requires a simple rate of return of at least 20%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-5. 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. Reg 1 Req 2A Req 2B Req 3A Reg 3B If Mr. Swanson requires a simple rate of return of at least 20%, should he acquire the franchise? Yes No Help Sau NEHMIG 1. Prepare a contribution format Income statement that shows the expected net operating income each ye franchise outlet 2-a. Compute the simple rate of return promised by the outlet. 2-5. I Mr. Swanson requires a simple rate of return of at least 20%, 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. Reg 1 Req 2A Req 2B Reg BA Req 3B Compute the payback period on the outlet. (Round your answer to decimal place.) Payback penod years Exercises/Problems & Help Save 1. Prepare a contribution format Income statement that shows the expected net operating Income each year franchise outlet 2-a. Compute the simple rate of return promised by the outlet. 2-. If Mr. Swanson requires a simple rate of return of at least 20%, 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. Reg 1 Req 2A Reg 2B Req 3Al Req 3B If Mr. Swanson wants a payback of three years or less, will he acquire theft Yes No Ree 3A