File Servers - HELP!!!

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Hi! I'm a student and am taking a Networking class. I have a project and need help.
The project is to consult with a small environmental firm, who is experiencing trouble finding how to take advantage of their network. They currently have an office of 8 employees. Each emp. ha sa Pentium computer with Windows 95. NICs have already been e=installed to each PC to cable them together. The client now wants to purchase a file server. They would like to know if this would be a good idea or if it would be a waste of money. I don't know enough yet about file servers. Can anyone help me?
honestly, it depends heavily on their needs.

If they would use a central station for all of their data, then obviously a file server would help them greatly. however, they may be better served by spending the money on upgrades for their current systems (for example, replacing win98) and then just using an extensive peer to peer network design.
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