What is the cost of saving each life

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Reference no: EM13159903

In the 1990s, Volvo introduced an automobile to the U.S. market in which the headlights were on whenever the engine was on; thus, the lights were on even during the day. In Sweden, the law required all motorists to drive with their headlight on even during the day. Since enacting this law, Swedish motorist%u2019s deaths had been reduced by 11%. Because of the extra energy used by the headlights and the need for more frequent replacement of the headlights, this practice added approximately $0.002/mi. in the 1990s, the U.S government had to decide if they wished to make this feature standard on all U.S. automobiles. At the time, there were 180 million automobiles and 250 million people in the United States. Each vehicle was driven about 15,000 miles each year. You were hired to help make the decision, so perform the following calculations.

1) How many lives would be saved?

2) What is the cost of saving each life?

3) Assuming a human life is valued at $ 7 million, is this legitimate expense?

About how many years will be required for $ 10,000 invested at 6% per year compounded annually to double in value? By creating an Excel spreadsheet.

Reference no: EM13159903

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