As the CFO of your company, it falls to you to make the final decision on large expenditures. Recently, your controller has proposed purchasing a new computer system at a cost of $50,000.
He believes the system will deliver savings of $60,000 in the accounting department and could be useful to other departments as well. Your treasurer takes a decidedly different view of the proposal. She claims that the company will have to borrow money to buy the computer system, and this will cost $11,000 in interest. As well, she is concerned that the amount of savings promised by the controller won’t materialize. Should you purchase the computer system?