-: 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

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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

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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

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Check out a sample textbook solution

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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

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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

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Check out a sample textbook solution

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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