Answer:
By choosing to install the software the company will lose $104,000 as the costs of installation far outweigh the benefits derivable from deploying the new management software.
Explanation:
Find below detailed calculation of the benefits or(loss) from this course of action:
The loss =Total benefits-total costs
The cost of software $55,000
Cost of installation $151,000
Total cost of software $206,000
Benefits
Reduction in staff $39,000
Saved general inventory costs $63,000
Total benefits $102,000
Loss from implementing software ($104,000)
The software's deployment would have been worthwhile if the benefits is for a long term,hence the costs can be spread over a number of years.
