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

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Accounting

Golf Products is considering whether to upgrade its equipment. Managers are considering two options. Equipment manufactured by Atlas Inc. costs $900,000 and will last five years and have no residual value. The Atlas equipment will generate annual operating income of $153,000. Equipment manufactured by Riverside Limited costs $1,320,000 and will remain useful for six years. It promises annual operating income of $231,000, and its expected residual value a $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.)

1st ____________(/)__________= Accounting rate of return

3 parts remaining....

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