Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time:

0

1

2

3

4

5

6

Cash flow

$5,300

$1,300

$2,500

$1,700

$1,700

$1,500

$1,300

Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)

Discounted payback

years

Should it be accepted or rejected?