Optilux Is considering investing in an automated manufacturing system. The system requires an initial investment of $$4\mathrm{.}7$ million, has a $20-$year life, and will have zero salvage value. If the system is implemented, the company will save $$720,000$ per year in direct labor costs. The company requires a $12\%$ return from its investments. $($PV of $$1,$ FV of $$1,$ PVA of $$1,$ and FVA of $$1)$

Note: 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 $12\%?$ Hint: It is not necessary to compute IRR to answer this question.

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

Required A

Required B

Compute the proposed investment's net present value.

Net present value