Vaughan Company has the opportunity to invest in a project that will cost $40,000 and have a useful life of 6 years and a salvage value of $10,000. Each year the project will generate revenue of $15,000. Annually it will have cash expenses of $1,000 for insurance, $1,000 for maintenance, and $3,000 for utilities. The company requires that a project payback in 50% of its useful life or less and the minimum rate of return for the accounting rate of return is 15%. Vaughan uses the straight line method of depreciation 1. The Accounting Rate of Return (ARR) for this project is 25% 2. The Payback Period (PP) is 4 years 3. If Vaughan is using the ARR to screen this project they will accept this project. If they are using the PP they will reject this project. None of the Statements are true O Both Statement #2 and #3 are true O All of the Statements are true o Only Statement #2 is true Only Statement #1 is true O Both Statement #1 and #3 are true O Both Statement #1 and #2 are true Only Statement #3 is true