Explain computer and software result in increased profits, Operation Management

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The chief information officer recommends that a new computer and software be purchased and installed at a cost of $100,000. This investment will decrease manpower costs by $4 per chair and shipping and handling by $2 per chair, which he says should result in an increase in profits of 10 percent. Will the purchase of the new computer and software result in increased profits, and if so, by how much?

a. Yes, by 12.6 percent.

b. No, by -9.8 percent.

c. Yes, by 22.6 percent.

d. Yes, by 7 percent.


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