Elf on a Shelf Company bought a new computer$-$assisted design $($CAD$)$ software for $$10,000,000$ at the beginning of Year $1.$ The software has a useful life of $3$ years and will save the company annual cash operating expenses of $$4,000,000$ in each of those $3$ years. The software will have a zero net salvage value at the end of $3$ years. It belongs to Class $12$ with a capital cost allowance $($CCA$)$ rate of $100\%.$ With special permission from the Canada Revenue Agency, the half$-$year CCA rule has been waived for the company to permit a maximum $100\%$ CCA deduction for Year $1.$ The company's income tax rate and after$-$tax cost of capital are $40\%$ and $12\%,$ respectively.

Required:

$1.$ Calculate the maximum total CCA tax shied available to the company.

$2.$ Calculate the present value of the annual cash savings in operating expenses.

$3.$ Calculate the net present value $($NPV$)$ of the investment.

$4.$ Was the internal rate of return $($IROR$)$ greater than or less than the company's after$-$tax cost of capital of $12\%?($Note: Do NOT try to calculate the implied actual internal rate or return.$)$

$5.$ By how much must the annual savings in operating expenses be increased or decreased to make the investment just worthwhile, that is$,$ either zero NPV or $12\%$ IROR?