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Homework: Chapter 12 Graded Homework - Winter 2021 Save Score: 0 of 5 pts 1 of 6 (1 complete) HW Score: 0%, 0 of 30
Homework: Chapter 12 Graded Homework - Winter 2021 Save Score: 0 of 5 pts 1 of 6 (1 complete) HW Score: 0%, 0 of 30 pts X E12-23A (similar to) Question Help Select Golf Products is considering whether to upgrade its equipment Managers are considering two options. Equipment manufactured by McKnight Inc. costs $900,000 and will last five years and have no residual value. The Mcknight equipment will generate annual operating income of $168,000. Equipment manufactured by Riverside 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 $105,000. Which equipment offers the higher ARR? First, enter the formula, then calculate the ARR (Accounting Rate of Return) for both pieces of equipment. (Enter the answer as a percent rounded to the nearest tenth percent.) Initial investment 960.000 Accounting rate of return 17.5 96 Average annual operating income from asset 168,000 235,750 $ Mcknight Riverside $ $ 1,150.000 20.5 Which equipment offers the higher ARR? The Riverside equipment offers the higher rate of return
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