What is the primary benefit of the ventilation system

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Reference no: EM131435726

A certain ventilation system would cost a firm approximately $60,000, which can be amoritized over its useful life at a cost of $15,000/year. Annual maintenace costs are expected to be $600 per year and amonthly operating costs (utilities) $150 per month. The system is expected to facilitate production by reducing the amount of machine cleaning for an expected annual savings fo $1200 per year. The primary benefit fo the proposed ventilation system is expected to be the elimination of the need for respirators, which cost the company $4000 per year in equipment, maintenance, employee training, and respiratory system management. The ventilation system is expected to reduce short term illness complaintes by an average of 6 per year and long term illnesses by an average of 0.2 per year. Short term illnesses result in a total cost of $600 per occurrence, including intangibles. Long term illnesses are expected to result in a total cost of $30,000 per occurrence, including intagibles. Use a cost benefit analysis to determine whether the ventilation system should be installed. What is the primary benefit of the ventilation system?

Reference no: EM131435726

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