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.

	Register A	Register B	Register C
Cash investment required	$7,200	$5,900	$6,600
Estimated machine life	4 years	4 years	4 years
Estimated residual trade-in value (at the end of 5 years)	$ 700	0	$ 300
Annual operating costs (excluding depreciation)	$ 600	$ 300	$ 300
Annual savings before deduction of costs	$2,500	$2,500	$2,500

Assume a 20% 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?