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. A suitable location in a large shopping mall can be rented for $3,400 per month b. Remodeling and necessary equipment would cost $312,000. The equipment would have a 20-year life and a $15,600 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 $370,000 per year. Ingredients would cost 20% of sales d. Operating costs would include $77,000 per year for salaries, $4,200 per year for insurance, and $34,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 110% 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 ompute the simple rate of retur 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 three years or less, will he acquire the franchise? outlet. The Yogurt Place, Inc., Contribution Format Income Statement Variable expenses: 0 Fixed expenses: + 0 Compute the simple rate of return promised by the outlet. (Round your answe Simple rate of return % Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years