ImagineThis is considering a project that has WACC = 8% and the following cash flow data.

Year 0: -$400

Year 1: $200

Year 2: $200

Year 3: $200

Assume that the cash flows occur evenly throughout the year.

Based on your calculations above, and the fact that the company requires a maximum discounted payback period of 2.5 years, should ImagineThis accept or reject this project?

Select one:

a. accept

b. reject