Question
The Short-Line Railroad is considering a $155,000 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 $155,000 investment in either of two companies. The cash flows are as follows:
| Year | Electric Co. | Water Works | ||||
| 1 | $95,000 | $30,000 | ||||
| 2 | 30,000 | 30,000 | ||||
| 3 | 30,000 | 95,000 | ||||
| 4 10 | 10,000 | 10,000 | ||||
a. Calculate the payback period for the investment in Electric Co. and Water Works.
| Payback period | |||
| Investment A | years | ||
| Investment B | years | ||
b. Which of the alternatives would you select under the payback method?
multiple choice
Electric Co.
Water Works
Both
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Routledge Handbook Of Social And Sustainable Finance
Authors: Othmar M. Lehner
1st Edition
1138343773, 978-1138343771
