A bicycle manufacturer is in talks to invest in some new equipment for their production department, and they are exploring different

options. The first option is equipment that will cost $$13000,$ and have expected operating income of $$99,$ and expected residual

income of $$18.$ The second option will cost them $$11400,$ have expected operating income of $$918,$ and expected res

$$37.$ If the company selects the first option, what is its required rate of return?