Question
The Short-Line Railroad is considering a $115,000 investment in either of two companies. The cash flows are as follows: Year Electric Co. Water Works 1
The Short-Line Railroad is considering a $115,000 investment in either of two companies. The cash flows are as follows:
| Year | Electric Co. | Water Works | ||||
| 1 | $ | 95,000 | $ | 10,000 | ||
| 2 | 10,000 | 10,000 | ||||
| 3 | 10,000 | 95,000 | ||||
| 4 10 | 10,000 | 10,000 | ||||
|
| ||||||
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?
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Investing In Fixed Income Securities Understanding The Bond Market
Authors: Gary Strumeyer
1st Edition
0471465127, 9780471465126
