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Question
63. A proposed engineering improvement to a process is expected to reduce accidents by a significant amount. The engineering improvement will represent an annual process cost of $5000, including interest and amortization of the original investment. The average direct Workers Compensation costs attributable to the type of accident that would be prevented is approximately $4000 per accident. Perform a cost benefit analysis to determine how much improvement in accident prevention would be necessary to justify this engineering improvement. Justify your analysis by stating any reasonable assumptions that are necessary.Answer
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