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 $4,700 per month. b. Remodeling and necessary equipment would cost $390,000. The equipment would have a 10-year life and an $39,000 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. ingredients would cost 20% of sales per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $500,000 per year d. Operating costs would include $90,000 per year for salaries, $5,500 per year for insurance, and $47,000 of 14.0% of sales Required 1. 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 Sales Variable expenses: Fixed expenses 0 2a. Compute the simple rate of return promised by the outlet. (Round percentage answer to 1 decimal place, i.e. 0.123 should be considered as 12.3%.) Simple rate of return 2b. If Mr. Swanson requires a simple rate of return of at least 21%, should he acquire the franchise? Yes No 3a. Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years