I have been requested to put together a proposal for a server to handle about 15-20 pcs. I'm not an IT guy but i am hoping wazuans can share their expertise.
1. What kind of specs does a desktop PC require to function as a server machine? Please list the major ones.
2. Are there any other auxiliary stuff i need?
3. Softwares?
4. Approximately how much would all this cost?

Ensure you get good specs to avoid degrading the server and desktops performance

20 machines aren't many ,so a desktop PC with good specs,like core2duo or i3 processor ,at least 500GB HDD,4GB RAM etc would do

Definitely you need extra softwares apart from the normal ones like anti viruses and such,like an email server software e.g MSExchange,mDaemon,mail enable. Etc

You need windows server software like windows server 2008 to allow you set up active directory,DHCP,DNS and such if you plan to centrally manage the users

What do u mean by Auxillary stuff, For the server only or also the network?

Approximately 55K to 65K to acquire the server alone

For the software you can either buy proprietary or use open source products

forgot to mention hard disk space. Is the server going to be used as a file server (i.e. for centrally storing data)? Space would be important, and you'd have to look for a computer with what's called a RAID setup (RAID has to do with data redundancy in case one disk fails).

A core i3 machine with a mirrored 300 or greater GB disk is what I would go for as an affordable solution.

The locationally Archive the Data to an External USB Hard drive of which you can get a good for 1 TB at about 10k. This is ideal for offsite storage backup. Thing do happen ( Fire, burglary, sabotage and other things that go bump in the night)when least expected and you find that even you Server is inaccessible.

Customize a desktop.

forget the domain setup, just use google drive, or dropbox and you will save all the above cost.