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quick answer plzzz Help Joe Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc. to dispense frozen yogurt products under the
quick answer plzzz
Help Joe Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc. to dispense frozen yogurt products under the name The Yogurt Place. Swanson has assembled the following information relating to the franchise: 8. A suitable location in a large shopping mall can be rented for $4.720 per month b. Remodelling and necessary equipment would cost $385,500. The equipment would have a 15 year life and an $16,500 salvage value. Straight line depreciation would be used c. On the basis of similar outlets elsewhere Swanson estimated that sales would total $538,000 per year. Ingredients would cost 20% of sales d. Operating costs would include $192,000 per year for salaries $6.750 per year for insurance and $34,800 per year for utilities. In addition, Swanson would have to pay a commission to The Yogurt Place of 12,5% of sales Required: 1. Prepare a contribution format Income statement that shows the expected net operating income each year from the franchise outlet JOE SWANSON Income Statement Deduct Operating expenses Total operating expenses 2.a. Compute the simple rate of return promised by the outlet. (Round your answer to 2 decimal places. (.e., 0.1234 should be considered as 12.34%).) Simple rate of return % 2-b. If Swanson requires a simple rate of return of at least 12.5%, should he acquire the franchise? O Yes O NO 3-a. Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years 3-b. If Swanson wants a payback of four years or less. Will he acquire the franchise? Yes O NO Step by Step Solution
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