EX $16-35($Algo$)$ Payback Period; Even Cash Flows $($Section $3)($LO $16-1,16-6,16-8)$

$[$The following information applies to the questions displayed below.$]$

The management of Niagara National Bank is considering an investment in automatic teller machines. The machines would cost $$134,400$ and have a useful life of seven years. The bank's controller has estimated that the automatic teller machines will save the bank $$28,000$ after taxes during each year of their life $($including the depreciation tax shield$).$ The machines will have no salvage value.

Use Appendix A for your reference.

Note: Use appropriate factor$($s$)$ from the tables provided.

EX $16-35($Algo$)$ Part $3$ Which of the following statements are true?

$3.$ Which of the following statements are true?

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Check my work is not available.

The payback perlod criterion fails to account for the time value of money.

The analyst can adjust for risk considerations using payback method while evaluating proposals.

The payback method is preferable to the net$-$present$-$value method.

If management uses the fyyback method, the investment will be approved only if the required payback period meets or exceeds the years calculated.

$$ The cut$-$off value for the payback period has nothing to do with the bank's hurdle rate.