Time savings alone will objectively justify the cost, but having a bean-counter approve it is another issue...
I've purchased two refurbished Compaq Presario 6000 machines recently. They've been fine. They now have a similar machine for $399 without a monitor. It has a 90 day warranty. [link|http://www.shopping.hp.com|http://www.shopping.hp.com] click on "outlet store" then click on "refurbished desktops" then click on "refurbished Compaq Presario desktops". (I'd post the URL but is has a bunch of Java session ID stuff in it...)
AthlonXP 2000+ (1.67 GHz)
256 MB PC2100
40 GB hard drive
48x12x48 CD-RW
10/100 ethernet, modem
Integrated graphics
Sound, etc.
WinXP Home
Mine was similar but has a 60 GB hard drive and a CD-RW/DVD combo drive. $420. and $400. for the two I bought.
I'm sure you can get similar machines elsewhere, and your local shop may be able to build something similar for less. Being able to buy them off the shelf saves the aggravation of putting them together yourself.
Otherwise, if they insist on the same hardware, I think you'll have to go with a server/thin client solution like KMS and others have outlined here.
Good luck.
Cheers,
Scott.