John has some savings and are evaluating this potential project to invest. He is considering to buy a new truck which will cost $100,000, and the truck is expected to last 10 years. At the end of the 10 years, this truck is estimated to worth $6,000. This truck will help John generate $15.500 annually, and there will be $2,100 maintenance fee associated to the truck every year. Please solve the following questions: 1. What is the Annual Rate of Return (ARR) for this project? (Hint: please use straight-line for depreciation expense) State all your assumptions and show your work step by step to get full marks. (4 Marks) 2. John is expecting the ARR to be at least 7%, should he invest in this project? (1 Mark) A B I E