Suppose That Installing an Overhead Pedestrian Walkway Would Cost a College

question 105

Multiple Choice

Suppose that installing an overhead pedestrian walkway would cost a college town $80,000.The walkway is expected to reduce the risk of fatality by 1.6 percent,and the cost of a human life is estimated at $10 million.The town should

• A) install the walkway because the estimated benefit is twice the cost.
• B) install the walkway because the estimated benefit equals the cost.
• C) not install the walkway,since the cost is twice the estimated benefit.
• D) install the walkway,since the cost of even a single life is too great not to take action.

---

Definitions:

Direct Materials

Direct materials are raw materials that are directly traceable to the manufacturing of a specific product and are an essential component of its production.

Production Budget

An estimate of the total units to be produced in a given period, considering forecasted sales and desired inventory levels.

Cash Receipts

The collection of money, including currency, checks, and electronic transfers, by a business.

Sales Budget

An estimate of future sales, often detailed in terms of volume and revenue, used for planning and controlling a business's operations.