Chapter 13 Problems Saved Help Save & Exit Submit Check my work 4 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 a $39,000 salvage points 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 $500,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $90,000 per year for salaries, $5,500 per year for insurance, and $47,000 per year for utilities. In eBook addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., 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. 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? 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? Print References Complete this question by entering your answers in the tabs below Req 1 Req 2A Req 2B Req 3A Req 3B 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