wer :If initial investment is less then $ 28,733.19 company should invest in this project

working notes for the above answer is follow

We have provided with the information

A company’s required IRR is 8%

cash flows from project are $5,000 per year

life of the project is 8 years.

What is the most the company should be willing to invest in this project?

weather to invest or not is dependant on the project’s own IRR. we should find out how much return the project give to the company that is why project’s own IRR should be found

If the project gives more return than a company’s required IRR is 8% then it should be accepted.If the project gives less return than a company’s required IRR is 8% then it should be reted

To find out project IRR we should have figure if Initial Investment and discounted cash flow for 8 years . IF NPV is positive project should be accepted otherwise rejected.

we will find prasent value of discounted cash flow for 8 year

PV = 5,000 / 1.08^8

= $ 28,733.19

If initial investment is less then $ 28,733.19 company should invest in this project