- Paul Swanson Has An Opportunity To Acquire A Franchise From The Yogurt Place Incorporated To Dispense Frozen Yogurt Pr 1 (64.68 KiB) Viewed 42 times
- Paul Swanson Has An Opportunity To Acquire A Franchise From The Yogurt Place Incorporated To Dispense Frozen Yogurt Pr 2 (84.7 KiB) Viewed 42 times
- Paul Swanson Has An Opportunity To Acquire A Franchise From The Yogurt Place Incorporated To Dispense Frozen Yogurt Pr 3 (52.14 KiB) Viewed 42 times
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Incorporate under The Yogurt Place name. Mr. Swanson has assembled the following information relatin a. A suitable location in a large shopping mall can be rented for $3,000 per month. b. Remodeling and necessary equipment would cost $288,000. The equipment would have value. Straight-line depreciation would be used, and the salvage value would be consider C. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $330,00 sales. d. Operating costs would include $73,000 per year for salaries, $3,800 per year for insuranc addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, Required: 1. Prepare a contribution format income statement that shows the expected net operating ince 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 17%, should he acquire the franc 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. Req 1 Req 2A Req 2B Req ЗА Reg 3B Compute the simple rate of return promised by the outlet. (Round your answer to 1 decimal plac Simple rate of return % < Req1 Req 2B>
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Incorporated, 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 $3,000 per month. b. Remodeling and necessary equipment would cost $288,000. The equipment would have a 15-year life and a $19,200 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 $330,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $73,000 per year for salaries, $3,800 per year for insurance, and $30,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 14.0% of sales. Required: Prepare a contribution format Income statement that shows the expected net operating Income each year from the franchise outlet 2-0. Compute the simple rate of return promised by the outlet 2-6. If Mr. Swanson requires a simple rate of return of at least 17%, should he acquire the franchise? 3-0. Compute the payback period on the outlet 3-5. 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. Reg 1 Req 2A Req 2B Red 3A Reg 30 Compute the payback period on the outlet. (Round your answer to 1 decimal place.) Payback period years < Reg 28 Reg 38 >