Question: Using the information provided in P, which would be the best investment using the payback period method? If the owner wanted her cash back in less than 4 years, should she invest in any of the machines?
P: You have the following information about three electronic sales registers that are in the market. The owner of a restaurant asks for your help in deciding which of the three machines to buy.
Assume a 30% income tax rate and straight-line depreciation.
a. Use the ARR method to decide which of the three machines would be the best investment.
b. If the restaurant owner wants a return on investment of at least 10%, what would you advise?