INTRODUCTION TO BUSINESS: WORLD OF FINANCE (b) JK Maroon Berhad is considering to acquire a new carriage truck. The new track would cost RM 385,000. Due to the increase in demand of the company's product, the management has estimates that the truck will generate the following income: Revenues (RM) Expenses (RM) Year 1 178,000 65,000 Year 2 188,000 82,000 Year 3 250,000 120,000 Year 4 324,000 144,000 Year 5 345,000 165,000 Year 6 400,000 195,000 Year 7 420,000 210,000 Year 8 485,000 280,000 The truck is expected to have an estimate useful life of 8 years and a combined salvage value of RM 50,000. Depreciation expenses are included in the total expenses. Traditionally JK Maroon Berhad has used a rule of thumb that a proposal should not be accepted unless it has a payback period that is less than 50 per cent of the asset's estimated useful life. Sukjin, the finance manager, has suggested that the business should not rely solely on the payback approach, but should also employ the net present value method when evaluating new investment. JK Maroon's management has established a 12 per cent desired rate of return. Required: (4 marks) (1) Calculate the payback period of the proposed investment. (1 mark)