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 cost $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 20% 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. O All of the Statements are true O Both Statement #1 and #2 are true Both Statement #1 and #3 are true o Only Statement #2 is true O Only Statement #3 is true O Both Statement #2 and #3 are true o Only Statement #1 is true None of the Statements are true