Sunrise Golf Products is considering whether to upgrade its equipment Managers are considering two options. Equipment manufactured by Smith Inc. costs $1,050,000 and will last six years and have no residual value. The Smith equipment will generate annual operating income of $194,250. Equipment manufactured by Little Stream Limited costs $1,125,000 and will remain useful for seven years. It promises annual operating income of $236,250, 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 rate of return Smith Little Stream Which equipment offers the higher ARR? The equipment offers the higher rate of return