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Pros and Cons of setting up a Domain

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What are the pros in a business sense for setting up a Domain? I know them from an IT perspective but am having a hard time articulating that to Management. We have 120 computers/users.

I have priced out 2 servers & 120 CALs at approximately $17,000 and am having a very hard time justifying that cost to the decision makers. To make matters worse we are approximately 25% XP, 50% Win 7 HP and 25% Win 7 Pro.

At first I would only use it for auth and policies but file server may come down the road. We currently use Google Apps for email and I would prefer to stay hosted so I don't need to mess with exchange.


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