Question
The Short-Line Railroad is considering a $140,000 investment I either of two companies. The cash flows are as follows: Year Electric Co. Water Works 1
The Short-Line Railroad is considering a $140,000 investment I either of two companies. The cash flows are as follows:
| Year | Electric Co. | Water Works |
| 1 | $85,000 | $30,000 |
| 2 | $25,000 | $25,000 |
| 3 | $30,000 | $85,000 |
| 4-10 | $10,000 | $10,000 |
A Using the payback method, what will the decision be?
B Explain why the answer in part A can be misleading.
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Founding Finance How Debt Speculation Foreclosures Protests And Crackdowns Made Us A Nation
Authors: William Hogeland
1st Edition
0292757530, 978-0292757530
