YES

TRS:

  app(app(apply(),f),x) -> app(f,x)

linear polynomial interpretations on N:

  app_A(x1,x2) = x1 + x2 + 1
  app#_A(x1,x2) = x1 + x2 + 1
  apply_A = 0
  apply#_A = 0

precedence:

  app = apply