Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are two and two and a half years, respectively.

TIME 0 1 2 3 4 5

Cash Flow -125,000 65,000 78,000 105,000 105,000 25,000

Use the NPV decision rule to evaluate this project; should it be accepted or rejected? Calculate the NPV. Show calculations.