Salem is willing to invest in van worth $9,000 to do transportation. If the cash inflows...

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Salem is willing to invest in van worth $9,000 to do transportation. If the cash inflows of a van are expected to be $3,000 annually for four years (Horizon of investment). Its annual depreciation expense 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 the minimum acceptable ARR of the Van business is 7%? Salem is willing to invest in van worth $9,000 to do transportation. If the cash inflows of a van are expected to be $3,000 annually for four years (Horizon of investment). Its annual depreciation expense 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 the minimum acceptable ARR of the Van business is 7%?

Answer rating: 100% (QA)

Answer 1 Calculating ARR Average Annual Return for the Van Business Heres how to calculate the ... View the full answer