Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Incorporated, to dispense frozen yogurt products under The Yogurt Place name. He assembled the following information relating to the franchise: a. A suitable location in a large shopping mall can be rented for $2,800 per month. b. Remodeling and necessary equipment would cost $276,000. The equipment would have a 20-year life and a $13,800 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 sales would total $310,000 per year. Ingredients would cost 20% of sales. d. Annual operating costs would include $71,000 for salaries, $3,600 for insurance, $28,000 for utilities, and a commission paid to The Yogurt Place, Incorporated, of 13.0% of sales. Required: 1. Prepare a contribution format income statement showing the expected net operating income each year from the franchise. 2-a. Compute the simple rate of return promised by the franchise. 2-b. If Mr. Swanson requires a simple rate of return of at least 15%, should he acquire the franchise? 3-a. Compute the payback period on this investment. 3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? Required 1 Required 2A Required 2B Required 3A Required 3B Prepare a contribution format income statement showing the expected net operating income each year from the franchise. The Yogurt Place, Incorporated Contribution Format Income Statement Variable expenses: Fixed expenses: Required 1 Required 2A Required 2B Required 3A Required 3B Compute the simple rate of return promised by the franchise. Note: Round your answer to 1 decimal place. Simple rate of return % Required 1 Required 2A Required 2B Required 3A Required 3B If Mr. Swanson requires a simple rate of return of at least 15%, should he acquire the franchise? Required 1 Required 2A Required 2B Required 3A Required 3B Compute the payback period on this investment. Note: Round your answer to 1 decimal place. Payback period years Required 1 Required 2A Required 2B Required 3A Required 3B If Mr. Swanson wants a payback of three years or less, will he acquire the franchise?