8. 8.32 An investor wants to know how many years he must retain ownership of a commercial property to make a current market return of 8% per year. The purchase price is $60,000 with taxes of $1800 the first year, increasing by $100 each year until sold. Assume the property must be retained for at least 2 years and that the sales price is estimated at $90,000 for years 3 and beyond.

(a) Determine the payback period using factors.

(b) (Spreadsheet exercise) Determine the payback period using a spreadsheet. 9. 8.33 The Sundance Detective Agency has purchased new surveillance equipment with the following estimates. The year index is k = 1,2, 3, … Calculate the payback period to make a return of 10% per year.