Required information

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 $$160,800$ and have a useful life of seven years. The bank's controller has estimated that the automatic teller

machines will save the bank $$33,500$ 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?

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 period 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 payback 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.