Select Golf Products is considering whether to upgrade its equipment. Managers are considering two options. Equipment manufactured by Root Inc. costs $900,000 and will last five years and have no residual value. The Root equipment will generate annual operating income of $153,000. Equipment manufactured by Riverside Limited costs $1,250,000 and will remain useful for six years. It promises annual operating income of $237,500, and its expected residual value is $100,000. Which equipment offers the higher ARR