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 $3,760 per month. b. Remodeling and necessary equipment would cost $292,000. The equipment would have a 15-year life and an $17,500 salvage value Straight-line depreciation would be used. c. On the basis of similar outlets elsewhere, Swanson estimated that sales would total $524,000 per year. Ingredients would cost 20% of sales. d Operating costs would include $206,000 per year for salaries, $6,400 per year for insurance, and $34,800 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 return 2.b. If Swanson requires a simple rate of return of at least 13.0%, should he acquire the franchise? Yes 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? Yes No