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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.

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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. Swanson has assembled the following Information relating to the franchise: a. A suitable location in a large shopping mall can be rented for $4,800 per month. b. Remodeling and necessary equipment would cost $396,000. The equipment would have a 10-year life and a $39,600 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 $510,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $91,000 per year for salaries, $5,600 per year for Insurance, and $48,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 14.5% 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, Mr. Swanson requires a simple rate of return of at least 22%, 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. Req1 Reg 2A Reg 28 Req 3A Reg 38 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 S-a. pure the paybac eriod 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. Req 1 Req ZA Reg 28 Reg 3A Req 38 Prepare a contribution format Income statement that shows the expected net operating income each year from the franchise outlet. The Yogurt Piece, Inc Contribution Format Income Statement Variable expenses Fixed expenses Req2A > Warison has assembled the following information relating to the franchise. a. A suitable location in a large shopping mall can be rented for $4,800 per month b. Remodeling and necessary equipment would cost $396,000. The equipment would have a 10-year life and a $39,600 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 $510,000 per year, Ingredients would cost 20% of sales. d. Operating costs would include $91,000 per year for salaries, $5,600 per year for insurance, and $48,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 14.5% 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 22%, 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 Red 2A Req 28 Reg JA Reg 38 Compute the simple rate of return promised by the outlet. (Hound your answer to 1 decimal place) Simple rate of return % 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 $4,800 per month. b. Remodeling and necessary equipment would cost $396,000. The equipment would have a 10-year life and a $39,600 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 $510,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $91,000 per year for salaries, $5,600 per year for insurance, and $48,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 14.5% 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. Mr. Swanson requires a simple rate of return of at least 22%, 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 28 Reg 3A Reg 38 ir Mr. Swanson requires a simple rate of return of at least 22%, should he acquire the franchise? Yes O No Next > Help Seve Eh 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 $4,800 per month. b. Remodeling and necessary equipment would cost $396,000. The equipment would have a 10-year life and a $39,600 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 $510,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $91.000 per year for salaries. $5,600 per year for insurance, and $48,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 14.5% 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 22%, 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. Req 1 Req 2A Reg 28 Reg Reg 38 Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years ( Req 28 Reg 30 > 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 $4,800 per month. b. Remodeling and necessary equipment would cost $396,000. The equipment would have a 10-year life and a $39,600 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 $510,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $91,000 per year for salaries, $5,600 per year for Insurance, and $48,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 14.5% 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 22%, 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 Req ZA Reg 28 Req 3A Rec: 38 Mr. Swanson wants a payback of two years or less, will he acquire the franchise? Yes ONO

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