Star Golf Products is considering whether to upgrade its equipment. Managers are considering two options.

Equipment manufactured by Heatherwood Inc. costs $$900,000$ and will last six years and have no residual

value. The Heatherwood equipment will generate annual operating income of $$153,000.$ Equipment

manufactured by Riverland Limited costs $$1,350,000$ and will remain useful for seven years. It promises annual

operating income of $$249,750,$ and its expected residual value is $$100,000.$

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.$)$