Golf Products is considering whether to upgrade its equipment. Managers are considering two options. Equipment manufactured by Vargas Inc. costs $$950,000$ and will last five years and have no residual value. The Vargas equipment will generate annual operating income of $$171,000.$ Equipment manufactured by Littleton Limited costs $$1,150,000$ and will remain useful for six years. It promises annual operating income of $$235,750,$ and its expected residual value is $$115,000.$

Which equipment offers the higher$$ ARR?