The Short-Line Railroad is considering a $110,000 investment in either of two companies. The cash flows are as follows:

Year	Electric Co.			Water Works
1	$	80,000		$	15,000
2		15,000			15,000
3		15,000			80,000
4 10		15,000			15,000

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?

• Water Works

• Electric Co.