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Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr.
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise a. A suitable location in a large shopping mall can be rented for $4,600 per month. b. Remodeling and necessary equipment would cost $384,000. The equipment would have a 10-year life and a $38,400 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 that sales would total $490,000 per year. Ingredients would cost 20% of d. Operating costs would include $89.000 per year for salaries, $5,400 per year for insurance, and $46,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 13.5% of sales. sales Book 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 2-5. I Me Swanson requires a simple rate of return of at least 20%, should be acquire the franchise? 3.a. Compute the payback period on the outlet 3-5. I Mr. Swanson wants a payback of two years or less, will he acquire the franchise? eferences Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg 3 Rea 3B 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 Variabis expenses Me GE Reg 1 Req 2A Reg 28 Req 3A Reg 3B Prepare a contribution format income statement that shows the expected net operating Income each year from the outlet. The Yogurt Place, Inc., Contribution Format Income Statement bok Variable expenses rences Fixed expenses Rag Req 2A > Required: 1. Prepare a contribution format income statement that shows the expected net operating income each ye 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 20%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3-5. If Mr. Swanson wants a payback of two 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 Reg 3B If Mr. Swanson requires a simple rate of return of at least 20%, should he acquire the franchise? Yes ONO hces Required: 1. Prepare a contribution format income statement that shows the expected net operating income each ye. 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 20%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3-b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 2B Reg 3A Reg 3B 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 franchis 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 20%, should he acquire the franchise? 3-a. Compute the payback period on the outlet 3-b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg 3A Req 38 If Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Yes ONO
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