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 $4,200 per month. b. Remodeling and necessary equipment would cost $360,000. The equipment would have a 15-year life and a $24,000 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. C. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $450,000 per year. Ingredients would cost 20% of sales d. Operating costs would include $85,000 per year for salaries, $5,000 per year for insurance, and $42,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 15.0% of sales. 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 21%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? & Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 2B Req Req 3B Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. $ 450,000 The Yogurt Place, Inc., Contribution Format Income Statement Sales Variable expenses Cost of ingredients $ 90,000 Commissions 67,500 OOOO 157.500 292,500 Contribution margin Fixed expenses Utilities $ Salaries Insurance OOOOO 42,000 85,000 5,000 50,400 22,400 Rent Depreciation 204,800 87,700 Net operating income Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req Req 3B Compute the simple rate of return promised by the outlet. (Round your answer to 1 decimal place.) Simple rate of return % Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Req Reg 3B If Mr. Swanson requires a simple rate of return of at least 21%, should he acquire the franchise? Yes ONO Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Reg 2B Req 3A Req 3B Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Req Req 3B If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? Yes | O No