Compute the payback period for both companies

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Reference no: EM131793649

Question: The Short-Line Railroad is considering a $185,000 investment in either of two companies. The cash flows are as follows:

Year	Electric Co.		Water Works
1	$	95,000	$	45,000
2		45,000		45,000
3		45,000		95,000
4-10		25,000		25,000

a. Compute the payback period for both companies. (Round your answers to 1 decimal place.)

b. Which of the investments is superior from the information provided?

Reference no: EM131793649

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