Pottier Transportation is trying to decide whether to require its drivers to take a driver safety course. The firm has 100 drivers and the cost of the course per driver is $1500, which includes the cost to the firm of people not working. If all 100 drivers take the course immediately, the insurance company will reduce the firm's auto insurance premium by $80000 immediately, and by $45000 in each of the next two years. In the managers' view, the only benefit of the course is a reduction in insurance premiums. The firm's chief financial officer says that the appropriate cost of capital is 7%. 

What is the net present value for the course?

Answer rating: 100% (QA)

To calculate the net present value of the driver safety course we need to find the present value of ... View the full answer