-: Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise. Given:- R e n t o f t h e l o c a t i o n = $ 3500 p e r m o n t h E q u i p m e n t c o s t = $ 270000 , S a l v a g e V a l u e = $ 18000 , S t r a i g h t L i n e D e p r i c i a t i o n t o b e u s e d S a l e s = $ 300000 , I n g r e d i e n t s c o s t = 20 % o f s a l e s S a l a r i e s = $ 70000 , I n s u r a n c e = $ 3500 , U t i l i t i e s = $ 27000 , C o m m i s s i o n 12.5 % o f s a l e s

Question

Want to see the full answer?

Answer 1

Question

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine

To determine:-:

Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise.

Given:-
               Rent of the location=$3500 per month

                               Equipment cost=$270000, Salvage Value=$18000, Straight Line Depriciation to be used

                                  Sales=$300000, Ingredients cost=20% of sales

Salaries=$70000, Insurance=$3500, Utilities=$27000, Commission 12.5% of sales

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Need assi

Consolidation after Several Years On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022. Required Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2022. Enter numerical answers using all zeros (do not abbreviate in thousands or in…

Give me the answer in a clear organized table please. Thank you!

Answer 2

Question

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine

To determine:-:

Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise.

Given:-
               Rent of the location=$3500 per month

                               Equipment cost=$270000, Salvage Value=$18000, Straight Line Depriciation to be used

                                  Sales=$300000, Ingredients cost=20% of sales

Salaries=$70000, Insurance=$3500, Utilities=$27000, Commission 12.5% of sales

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine

To determine:-:

Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise.

Given:-
               Rent of the location=$3500 per month

                               Equipment cost=$270000, Salvage Value=$18000, Straight Line Depriciation to be used

                                  Sales=$300000, Ingredients cost=20% of sales

Salaries=$70000, Insurance=$3500, Utilities=$27000, Commission 12.5% of sales

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine

To determine:-:

Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise.

Given:-
               Rent of the location=$3500 per month

                               Equipment cost=$270000, Salvage Value=$18000, Straight Line Depriciation to be used

                                  Sales=$300000, Ingredients cost=20% of sales

Salaries=$70000, Insurance=$3500, Utilities=$27000, Commission 12.5% of sales

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine

To determine:-:

Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise.

Given:-
               Rent of the location=$3500 per month

                               Equipment cost=$270000, Salvage Value=$18000, Straight Line Depriciation to be used

                                  Sales=$300000, Ingredients cost=20% of sales

Salaries=$70000, Insurance=$3500, Utilities=$27000, Commission 12.5% of sales

Answer 6

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine

To determine:-:

Here, in the given problem we have to determine whether the decision of Paul Swanson to acquire a franchise from The Yogurt Place inc. is beneficial for the organisation or not by two capital budgeting techniques namely Simple Rate of return and Payback period. Also there is a need to prepare a contribution format income statement showing net operating income each year from the franchise.

Given:-
               Rent of the location=$3500 per month

                               Equipment cost=$270000, Salvage Value=$18000, Straight Line Depriciation to be used

                                  Sales=$300000, Ingredients cost=20% of sales

Salaries=$70000, Insurance=$3500, Utilities=$27000, Commission 12.5% of sales

Answer 7

Chapter 14, Problem 19P

Capital Budgeting is used by organisations to determine as to whether the project which they are undertaking is fruitful for the organisation or not. There are various techniques in capital budgeting which an organisation uses to decide on the investment proposal. Most popular ones are Net Present value, Internal Rate of return, Simple rate of return, Payback period etc.

To determine