Super Golf Products is considering whether to upgrade its equipment. Managers are considering two options. Equipment manufactured by Root Inc. costs $$1,100,000$ and wi

last five years and have no residual value. The Root equipment will generate annual operating income of $$170,500.$ Equipment manufactured by Lakeshore 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 $$110,000.$

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 percen

Which equipment offers the higher ARR?

The

equipment offers the higher rate of return.