(d) Despite your answer in part (c) above, payback period remains a highly used method in practice. Why do you think the payback method is popular? (3 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 o 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