Adima Hire has an opportunity to invest in a new grinding machine that costs $50,000. The machine will generate cash flows of $25,000 one year from now, $20,000 two years from now, and $15,000 three years from now. The machine will be worthless after three years, and no additional cash flows will occur. Adima Hire has determined that the appropriate discount rate is 7 percent for this investment.

a) Calculate the NPV of the project. [7 marks]

b) Based on your calculation above, should Adima Hire accept or reject the project. [3 marks]