A newly built business property containing space for a store and two offices, can be purchased for $1,200,000. A prospective buyer estimates that during the next 10years he can obtain annual rentals of at least $458,460 from the property and that the annual out-of-pocket disbursements will not exceed $60,000. He believes that he should be able to dispose of the property at the end of 10years at not less than $700,000. Annual taxes and insurance will total 2.5% of the first cost. a.) What recommendations would you make if he had to borrow 25% of the required capital, on the basis of a 10-year amortization with interest of 18% ? Use Annual Worth Method. b.) If the entire capital can be obtained by floating bonds at 15% that will mature in 10years, what would you recommend? Sinking fund interest is 15%. Use PW method and compute for the payback period