Final answer:
The NTFS file system should be used for the 20 MB partition to allow the implementation of security settings that give local users read-only access to the files. Permissions would need to be adjusted to assign 'Read' permissions to these users.
Step-by-step explanation:
To share an annual report with read-only access for local users, you would need both an appropriate file system and specific security settings. For the 20 MB partition, the NTFS file system is an excellent choice due to its support for permissions and security features. After formatting the partition with NTFS, you would proceed to set the security settings as follows:
- Allocate the partition: Make sure the 20 MB partition is created and formatted with NTFS.
- Assign permissions: Right-click the partition in Windows Explorer, choose 'Properties', navigate to the 'Security' tab, and then edit the permissions. Add the local users or groups who need access and assign them 'Read' permissions to ensure they have read-only access.
- Apply the settings: Confirm the changes to ensure the security settings are correctly applied to the partition.
By setting up the NTFS file system and configuring the permissions, you will ensure that local users can only read the files and cannot modify them.