The following table presents information on a potential project currently being evaluated by XYZ. Which assertion about statement 1 and statement 2 is true?

Expected cash flows (number of years from today)

2

Cost of capital

3

4

-$66,000.00 $32,000.00 $22,000.00 $30,000.00 $4,000.00

14.25%

Statement 1: XYZ would accept the project based on the project's net present value and the NPV rule.

Statement 2: XYZ would accept the project based on the project's payback period and the payback rule if the payback threshold is 2.76 years

• Statement 1 is true and statement 2 is false
• Statement 1 is true and statement 2 is true
• Statement 1 is false and statement 2 is true
• Statement 1 is false and statement 2 is false