Question: You are working as an aerospace engineer for Boeing and you are helping the software engineer there to code a Traffic Alert and Collision Avoidance

You are working as an aerospace engineer for Boeing and you are helping the software engineer there to code a Traffic Alert and Collision Avoidance System (TCAS) inside the autopilot module. Introducing such a system needs $525,000,000 in initial capital costs and $10 M in operating costs each year. It is expected that annually it can save 20 people given that a plane crash is an extremely rare event nowadays. Assume a discount rate of 8.75%, an average aero plane service life of 30 years, and a statistical value of human life (SVL) is $ 6 M. What is the B/C ratio for such an investment?

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