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Business, 27.06.2019 04:00 406462

You are the vice-president for sales at a major automobile company. in response to current needs you have developed an economical sub-compact vehicle. you anticipate selling 11 million vehicles on this production run. one of your engineering teams discovers that due to the design there is a higher probability of the vehicles catching fire upon rear impact accidents. you are given a cost/benefit analysis which shows it will cost $22.00 per vehicle to change the design at a cost of $242,000,000.00. this change will result in 180 less deaths. the national highway traffic safety administration shows the “cost to society” for each estimated fatality is $400,000.00. this means the design change will save $72,000,000.00. assume that this is an accurate assessment of the costs/benefits involved (that is, you should assume that no additional costs or benefits will arise)(although keep in mind that the true costs of a particular course of action may not always be accurately identified and quantified.) refer to fact scenario a: question a1: using the standard cost-benefit analysis it does not make sense to make the design change.

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