q5

Sunrise Golf Products is considering whether to upgrade its equipment Managers are considering two options. Equipment manufactured by Vargas Inc. costs $800,000 and will last six years and have no residual value. The Vargas equipment will generate annual operating income of $156,000. Equipment manufactured by Little Stream Limited costs $1,350,000 and will remain useful for seven years. It promises annual operating income of $249,750, and its expected residual value is $110,000 Which equipment offers the higher ARR? First, enter the formula, then calculate the ARR (Accounting Rate of Return) both pieces of equipment. (Enter the answer as a percent rounded to the nearest tenth percent.) Accounting rate of return Choose from any drop-down list and then click Check Answer. ? parts remaining Clear All Check