### Cost benefit analysis

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##### Reference no: EM1322512

Sun Gas wants to move its sales order system to the Web. CFO Carrie Smith believes that dealers will not adopt the new web system unless Sun-Gas provides financial assistance o upgrade their PCs. Smith estimates \$750,000 as a onetime cost. Sun-gas will have to invest \$150,000 to update their own computer systems. The cost of the software and the consulting fee for installing the system will be \$230,000. The Web system will eliminate 25 clerical positions. Smith estimates that the lower labour costs will save the company \$1,357,000. Use the cost benefit analysis to recommend to Smith whether Sun Gas should proceed will the Web based ordering system. Give your reasons, showing supporting calculations.

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