OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $$4$ million, has a $20-$year life, and will have zero salvage value. If the system is implemented, the company will save $$500,000$ 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)$

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 $10\%?$ Hint: It is not necessary to compute IRR to answer this question.

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Required $A$

Compute the proposed investment's net present value.

Net present value