The Short-Line Railroad is considering a $200,000 investment in either of two companies. The cash flows are as follows:
| Year |
Electric Co. |
Water Works |
| 1 |
$ |
100,000 |
|
$ |
50,000 |
|
| 2 |
|
50,000 |
|
|
50,000 |
|
| 3 |
|
50,000 |
|
|
100,000 |
|
| 4 - 10 |
|
25,000 |
|
|
25,000 |
|
|
Compute the payback period for both companies. (Round your answers to 1 decimal place.)
Electric Co= ____years
Water Company= ____ years