Cost Benefit Analysis
Not what you're looking for?
A certain type of injury has tangible costs of $40,000 per occurrence and intangible costs of $150,000 per occurrence. Injury frequency is .05 per year but would be reducible to .01 per year with the installation of a new guarding system. Calculate the annual benefit the new system provides.
A certain company estimates that implementation of a safety glasses policy will cost $8000 per year. Eye injuries are rare in this plant, but 2 have occurred over the past five years at a cost of $50,000 each including direct costs and estimated hidden intangible costs. It is believed that the proposed safety glasses policy will reduce the hazard of eye injuries by 75%. If interest and inflation are ignored, the $20,000 actual cost is assumed to be typical of eye injury costs.
Perform a cost/benefit analysis to weigh the benefits of the proposed safety glasses policy against its expected costs.
Purchase this Solution
Solution Preview
Cost Benefit Analysis
________________________________________
A certain type of injury has tangible costs of $40,000 per occurrence and intangible costs of $150,000 per occurrence. Injury frequency is .05 per year but would be reducible to .01 per year with the installation of a new guarding system. Calculate the annual benefit the new system provides.
Each injury costs $40,000 + $150,000 = $190,000 each time it occurs.
Currently there are 0.05 such injuries per year (this is an average, which is why the number can be less than 1). Therefore, the average annual cost is:
($190,000)(0.05) = $9500
If a new guarding system is installed, the average number of injuries per year will fall to 0.01. Then, the average annual cost will be:
($190,000)(0.01) = $1900
The new guarding system will ...
Purchase this Solution
Free BrainMass Quizzes
Know Your Statistical Concepts
Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.
Measures of Central Tendency
Tests knowledge of the three main measures of central tendency, including some simple calculation questions.
Terms and Definitions for Statistics
This quiz covers basic terms and definitions of statistics.
Measures of Central Tendency
This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.