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

Expected Cash Flows(# of years) Cost of Capital

0: -$73,000 12.04%

1: $38,000

2: $25,000

3: $35,000

4: $5,000

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 if the payback threshold is 2.66 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