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 three and three and a half years, respectively.

Time012345

Cash Flow-100,00030,00045,00055,00030,00010,000

Calculate the payback and use the payback decision rule to evaluate this project; should it be accepted or rejected?Show your calculations.