Summertime Fun Inc. has 1,300,000 shares of common stock outstanding that are trading at $258 per share. The risk-free rate of return is 2.35 percent, the company has a beta of 1.6, and the expected market risk premium is 11.44 percent. The firm just paid an annual dividend of $31.70 per share to its common stockholders, and it expects dividends to increase by 5.3% annually for the indefinite future. The firm has 790,000 shares of 14% preferred stock outstanding that are priced at $155 per share. The preferred stock has a par value of $100 each. Lastly, the firm has 415,000 bonds outstanding that each have a face value of $1,000, mature in 10 years, have a coupon rate of 7.2 percent, and pay interest semiannually. The bonds are priced at 103 percent of face value. The corporate tax rate is 21 percent. Assume the weighted average cost of capital is based on the average cost of equity.

The firm is considering a project that will initially cost $125 million, which it anticipates will generate after-tax cash flows of $33.5 million annually for the next 5 years. Assume this project is equally as risky as the overall firm. What is its net present value? Should the project be accepted or rejected based on this value?