Which of the following statements are correct regarding the payback period?

I - The payback period is computed based on the present value of each of a project's cash flows.

II - The payback period is biased in favor of short-term investments and liquidity.

III - The payback period considers the timing and the amount of all the project's cash flows.

IV - The payback period is best used to evaluate low-cost and short-term projects.

1) I and III

2) I and IV

3) II and IV

4) I, II and III