2. Face Mask Berhad is thinking of buying a new high-tech machine from Japan to replace its existing five years old machine. The cost of the new machine is RM600,000 and is estimated to have a useful life of five years with a scrap value od RM20,000. Since this machine is imported from Japan, an import duty of RM50,000 must be paid. In addition, the company has to pay RM15,000 for shipping and another RM5,000 for installation. The machine will be depreciated using the straight-line method. The machine is expected to generate RM60,000 every year for the next five years. The existing machine, originally costing RM260,000, has another five years of useful life. It is estimated that the machine will have salvage value of RM20,000 at the end of useful life. However, if it is sold now, the company can get RM110,000 from another company which has agreed to buy the machine. Since the new machine is more efficient, it is expected that inventories of raw material will be increased by RM20,000. Accounts payable is also expected to increase by RM8,000 to support operations. The corporate tax rate is 25%. a. Calculate the Payback period (3 marks) b. Determine the initial outlay