As CEO of Aqua Marine, Carrie Easton knows it is important to control costs and to respond quickly to changes in the highly competitive boat-building industry. When Rose Consulting proposes that Aqua Marine invest in an ERP system, she forms a team to evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and the management accountant.

A month later, management accountant Mark Cole reports that the team and Rose estimate that if Aqua Marine implements the ERP system, it will incur the following costs:

$435,000 in software costs

$95,000 to customize the ERP software and load Aqua Marine's data into the new ERP system

$105,000 for employee training

The team estimates that the ERP system should provide several benefits:

More efficient order processing should lead to savings of $105,000.

Streamlining the manufacturing process so that it maps into the ERP system will create savings of $125,000.

Integrating purchasing, production, marketing, and distribution into a single system will allow Aqua Marine to reduce inventories, saving $225,000.

Higher customer satisfaction should increase sales, which, in turn, should increase profits by $155,000.

1. If the ERP installation succeeds, what is the dollar amount of the benefits?

2. Should Aqua Marine install the ERP system? Why or why not? Show your calculations