Select Golf Products is considering whether to upgrade its equipment Managers are considering two options. Equipment manufactured by McKnight Inc. costs $940,000 and will last four years and have no residual value. The McKnight equipment will generate annual operating income of $141,000. Equipment manufactured by Little Stream 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.) Accounting Average annual operating income from asset Initial investment Il rate of return McKnight = % Little Stream = % Which equipment offers the higher ARR? The (1) equipment offers the higher rate of return. (1) O McKnight O Little Stream