Salem is willing to invest in van worth $9,000 to do transportation. If the cash inflows of a vanare expected to be $3,000 annually for four years (Horizon of investment). Its annual depreciationexpense will be $9,000/4 = $2,250 and its annual cash expenses = $500

1- Calculate the ARR for the Van business.

2- As a lending officer in Sharjah Islamic Bank, would you accept the loan application if theminimum acceptable ARR of the Van business is 7%