(iii) payback period (6 marks)

Question 4 Bersatu Teguh Berhad is considering the purchase of a new bus to add to its existing fleet of tourist busses. They are considering four possible alternatives and they have estimated that the cash flows from the four different choices are as follows: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Bus RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 A (500) 200 200 200 200 200 B 100 100 100 100 500 (400) (150) 40 50 60 70 100