ter 12 Homework Saved 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 ts 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 kipped 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. eBook 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? Pint 3-a. Compute the payback period on the outlet. Roferences3-b. If Mt. Swanson wants a payback of three years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req 2A Req 2 Req 3A Reg 3 Req 1 Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet Contribution Format Income St Fixed expenses r 12 Homework 2-b. " Mr. Swanson requires a simple rate ot return ot at least 21%, should he acquire the tranch 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? Complete this question by entering your answers in the tabs below. ped Req 2A Req 1 Req 2B Req 3A Req 3B Prepare a contribution format income statement that shows the expected net operating income each y outlet. ook The Yogurt Place, Inc Contribution Format Income Statement rint Sales Variable expenses: rences 0 0 Fixed expenses: 3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req 2A Req 3A Req 1 Req 2B Req 3B Prepare a contribution format income statement that shows the expected net operating income e outlet. The Yogurt Place, Inc. Contribution Format Income Statement Sales Variable expenses: wRee. Fixed expenses: 0 0 Req 2A > ee yeais of less, w ne acquire the franchise? Complete this question by entering your answers in the tabs below. Req 2B Req 3A Req 3B Req 1 Req 2A Compute the simple rate of return promised by the outlet. (Round percentage answer to 1 deci Simple rate of return K Req 1 Req 28 ) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 38 Swanson requires a simple rate of return of at least 21%, should he acquire the franchise? If Mr. OYes ONo e yeals f less, Will he acquire the franchise? Complete this question by entering your answers in the tabs below. Req 2B Req 3B Req 1 Req 2A Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years Req 2B Req 3B > nee yes f less, lhe acquire the franchise? Complete this question by entering your answers in the tabs below. kiq 3B Req 1 Req 2B Req 3A Req 2A If Mr. Swanson wants a payback of three years or less, will he acquire the franchise? OYes ONo Req 3A Req 3B