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Compute the payback period for both companies

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Question - The Short-Line Railroad is considering a $150,000 investment in either of two companies. The cash flows are as follows:

Year

Electric Co.

Water Works

1.

$75,000

$30,000

2

30,000

45,000

3

45,000

75,000

4 - 10

15,000

15,000

a. Compute the payback period for both companies.

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

Reference no: EM132607341

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