Dream Easy, a manufacturer of mattresses, sells 10 different models of mattresses. Each model generates $4,000,000 in sales each year. Dream Easy currently does not have the resources to be able to determine the profitability of each product line. Steve, the company president, has a hunch that one of the models is not profitable, and estimates a loss of $400,000 each year.

He suggests installing a new managerial accounting information system at a cost of $120,000 per year. This system would determine the profitability of each product line, so Dream Easy could stop manufacturing unprofitable models.

Assuming Steve's assumption is correct, should Dream Easy install the new system? Explain.