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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.

Answer :

Requirement 1: $257,000 Positive

Requirement 2: IRR is higher than 10%

What is investment?

An investment entails using money now in order to raise its value later. In order to make an investment, capital must be put to use. This capital can take the shape of time, money, effort, etc.

How do new investors invest?

Putting money into an online investment account, which can later be used to buy shares of stock or stock mutual funds, is one of the greatest ways for novices to learn how to invest in stocks. You can open a brokerage account and start investing for the cost of one share in many cases.

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