Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name Me Swanson has assembled the following information relating to the franchise BOOK a A suitable location in a large shopping mall can be rented for $3,500 per month b. Remodeling and necessary equipment would cost $270,000. The equipment would have a 15-year life and an $18,000 salvage value Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation c Based on similar outlets elsewhere. Me Swanson estimates that sales would total $300,000 per year. Ingredients would cost 20% of sales d Operating costs would include $70,000 per year for salaries, $3,500 per year for insurance, and $27.000 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: 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- If Mr. Swanson requires a simple rate of return of at least 12%, should he acquire the franchise? 3-a Compute the payback period on the outlet 3.b. if Mr. Swanson wants a payback of four years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Regi Reg 2A Reg 28 Rog JA Reg38 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 Fidesport Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet, 2-0. Compute the simple rate of return promised by the outlet 2-b If Me Swanson requires a simple rate of return of at least 12%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3-b. If Mr. Swanson wants a payback of four years or less, Will he acquire the franchise? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 28 Reg 3A Reg 38 Compute the simple rate of return promised by the outlet. (Round your final answer to the nearest whole percent.) Simple rate of return % 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 12%, should he acquire the franchise? 3-a Compute the payback period on the outlet 3- If Me Swanson wants a payback of four years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Req 3A Req3 If Mr. Swanson requires a simple rate of return of at least 12%, should he acquire the franchise? Yes ONO 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 12%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3-b If Mr. Swanson wants a payback of four years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req1 Reg 2A Req 28 Reg 3A Reg 38 Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years 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 12%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3.b. if Mr. Swanson wants a payback of four years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 28 Req 3A Req 38 If Mr. Swanson wants a payback of four years or less, will he acquire the franchise? Yes ON
