Question #20: Mainstream Inc. uses multiple methods to determine which project to select. When evaluating its latest project, the development of an electric engine, the results of the multiple methods were:

Net Present Value = a negative amount of $(12,458)

Internal Rate of Return = 12.86% (required return must be 11.4%)

Payback Period = 3.58 years (Payback Period must be less than 4 years)

Required: a) Should Mainstream Inc. accept or reject the project to develop the electric engine?

b) Why?