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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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