Question

2)The Short-Line Railroad is considering a $185,000 investment in either of two companies. The cash flows are as follows:
 YearElectric Co.Water Works1$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.)   Payback Period  Electric Co. years    Water Works years  
 b.Which of the investments is superior from the information provided?   Electric Co.Water Works 

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