The chief information officer recommends that a new computer and software be purchased and installed at a cost $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, 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.