Homework: HW #7 Chapter 12 Score: 0.56 of 1 pt - 6 of 9 (6 complete) OE12-21A (similar to) Save HW Score: 47.22%, 4.72 of 10 pts Question Help * Slice Golf Products is considering whether to upgrade its equipment. Managers are considering two options. Equipment manufactured by Smith Inc. costs $1,000,000 and will last four years and have no residual value. The Smith equipment will generate annual operating income of $160,000. Equipment manufactured by Lakeshore Limited costs $1,170,000 and will remain useful for five years. It promises annual operating income of $234,000, and its expected residual value is $115,000. 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.) Average annual operating income from asset Initial investment = Accounting rate of return Smith $ 160,000 1,000,000 16.0 % Lakeshore 23000 1,170,000 1.96 %