Jack, a gymnastic coach, is considering starting an online live streaming service for primary school kids. After his careful consideration and appropriately applying capital budgeting methods, he has decided to borrow money to finance the initial cost to implement and start the service. Which ONE of the following statements is correct?

(Tick here if you think that none of the statements is correct.)

If Jack has used the payback-period approach, he ignored the cost but only considered the sales from the new service.

If Jack has used the payback-period approach, he only considered the present value of the cash flow but ignored the initial cost.

Suppose Jack used internal rate of return (IRR). Assuming he found only one IRR, the interest rate Jack has to pay must be lower than the IRR.

Suppose Jack used net present value (NPV). The initial cost to implement the online live streaming service can be higher than the future value of Jack's estimate of the cash flows generated from the service.