Which of the following statements is true?

In the payback method, depreciation is added back to net operating income when computing the annual net cash flow.

When a company is cash poor, a project with a short payback period but a low rate of return may be preferred to a project with a long payback period and a high rate of return.

A shorter payback period does not necessarily mean that one investment is more desirable than another.

Multiple Choice

Only statement $1$ is true.

Only statement $3$ is true.

All of the statements are true.

None of the statements are true.