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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: a. A suitable location in a large shopping mall can be rented for $5,100 per month b. Remodelling and necessary equipment would cost $371,000. The equipment would have a 15-year life and an $12,500 salvage value. Straight-line depreciation would be used. c. On the basis of similar outlets elsewhere, Swanson estimated that sales would total $338,000 per year. Ingredients would cost 20% of sales. d Operating costs would include $66,500 per year for salaries, $5,950 per year for insurance, and $30,900 per year for utilities. In addition, Swanson would have to pay a commission to The Yogurt Place 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 JOE SWANSON Income Statement Deduct Operating expenses Total operating expenses 0 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 retum % 2-b. If Swanson requires a simple rate of return of at least 8.5%, should he acquire the franchise? O Yes O No 3-a. Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years 3-b. If Swanson wants a payback of four years or less, will he acquire the franchise? O Yes O No