OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $$6\mathrm{.}0$ million, has a $20-$year life, and will have zero salvage value. If the system is implemented, the company will save $$740,000$ per year in direct labor costs. The company requires a $10\%$ return from its investments. $($PV of $$1,FV$ of $$1,$ PVA of $$1,$ and FVA of $$1)($Use appropriate factor$($s$)$ from the tables provided.$)$

a$.$ Compute the proposed investment's net present value.

b$.$ Using the answer from part a$,$ is the investment's internal rate of return higher or lower than $10\%?$

Complete this question by entering your answers in the tabs below.

Requir$$d A

Required B

Compute the proposed investment's net present value.

Net present value