Solution-What is the payback period for each POS system

What is the payback period for each POS system

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Question - You have the following information about three point of sale systems on the market. The owner of a restaurant asks for your help in deciding which of the three machines to buy.

	Adamo	Sitaara	Ensolarado
Cash Investment	$6,300	$6,000	$6,700
Estimated Machine Life	5 Years	5 Years	5 Years
Estimated Trade in Value after 5 years	500	0	300
Annual Operating Costs (does not include depreciation)	400	300	300
Annual Savings Before Deduction of Costs	$2,000	$2,000	$2,000

Assume a 30% income tax rate and straight-line depreciation.

a) Use the ARR method to decide which of the three POS systems would be the best investment.

b) If the restaurant wants a return on investment (ROI) of at least 10%, what would you advise?

c) What is the payback period for each POS system?

Reference no: EM133085651

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What is the payback period for each POS system

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Reference no: EM133085651

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