The operations department of a major financial institution is planning to reorganise several of its back-office functions. Its current operating expense is $1 200 000, of which $1 000 000 is for staff expenses. The financial institution uses a 10 per cent cost of capital to evaluate cost-saving projects. One way of reorganising is to outsource overseas a portion of its data entry functions. This will require an initial investment of approximately $600 000 after taxes. The financial institution expects to save $160 000 in annual operating expenses after tax for the next seven years. Should it undertake this project, assuming that this change will lead to permanent savings?