JOE SWANSON Income Statement Deduct: Operating expenses: 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 %2-b. If Swanson requires a simple rate of return of at least 7.5%, 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 NoJoe 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 $5,180 per month. b. Remodelling and necessary equipment would cost $302,500. The equipment would have a 15year life and an $11,500 salvage value. Straightline depreciation would be used. c. On the basis of similar outlets elsewhere, Swanson estimated that sales would total $414,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $126,000 per year for salaries, $6,250 per year for insurance, and $33,700 per yearfor utilities. In addition, Swanson would have to pay a commission to The Yogurt Place of12.5% of sales. Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet