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Quick Step Goil Products is considering whather to upgrede its equipment. Managers are considering two options. Equipment inanutactured by Root inc. costs $900, 000 and
Quick Step Goil Products is considering whather to upgrede its equipment. Managers are considering two options. Equipment inanutactured by Root inc. costs $900, 000 and will last fhe yoart and hove no residual value. The Root equipment will gerierate annual operating inoome of $153,000. Equipment manufochured by Rustic Limited oosts $1,375,000 and wil remain useful for slo years. It promises annual operating income of $247,500, and its expected residual value is $115,000. Which equipment otlers the higher APCR? First enter the formula, then caiculate the ARR (Accounting Rate of fetum) for both pieces of equipment. (Enter the answer as a percent rourdtod to the nearost tenth percent.) Accounting
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