You are analyzing three programs. Program A has $1 million of costs in years 0, 1...
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You are analyzing three programs. Program A has $1 million of costs in years 0, 1 and 2 and benefits of 25 lives saved in year 2 and 50 lives saved in year 3. Program B has the same costs as Program A, but doesn't save any lives until year 25 when it will save 75 lives. Program C has $1 million in costs in years 25, 26 and 27 and will save 25 lives in year 27 and 50 lives in year 28. For each of the specified discounting approaches fill in the table below. When ranking programs, 1 is the most preferred (best) rank and 3 is the worst. If two programs are tied give them the same number. For example if A and B are tied for first and then C is next; Rank A=1, B=1, and C=2. a. Discount costs at a rate of 5% per year, but do not discount benefits Cost per Life Saved Rank (1 is best) (rounded to nearest dollar) Program A Program B Program C b. If you discount both costs and benefits at a rate of 5% per year how will you rank the programs in terms of costs per unit of benefit? Cost per Life Saved Rank (1 is best) (rounded to nearest dollar) Program A Program B Program C c. If you discount costs at 5% per year and benefits at a rate of 2% per year, how will you rank the programs in terms of cost per unit of benefit? Cost per Life Saved Rank (1 is best) (rounded to nearest dollar) Program A Program B Program C You are analyzing three programs. Program A has $1 million of costs in years 0, 1 and 2 and benefits of 25 lives saved in year 2 and 50 lives saved in year 3. Program B has the same costs as Program A, but doesn't save any lives until year 25 when it will save 75 lives. Program C has $1 million in costs in years 25, 26 and 27 and will save 25 lives in year 27 and 50 lives in year 28. For each of the specified discounting approaches fill in the table below. When ranking programs, 1 is the most preferred (best) rank and 3 is the worst. If two programs are tied give them the same number. For example if A and B are tied for first and then C is next; Rank A=1, B=1, and C=2. a. Discount costs at a rate of 5% per year, but do not discount benefits Cost per Life Saved Rank (1 is best) (rounded to nearest dollar) Program A Program B Program C b. If you discount both costs and benefits at a rate of 5% per year how will you rank the programs in terms of costs per unit of benefit? Cost per Life Saved Rank (1 is best) (rounded to nearest dollar) Program A Program B Program C c. If you discount costs at 5% per year and benefits at a rate of 2% per year, how will you rank the programs in terms of cost per unit of benefit? Cost per Life Saved Rank (1 is best) (rounded to nearest dollar) Program A Program B Program C
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Answer a To calculate the cost per life saved without discounting benefits we can use the formula textCost per Life Saved fracTotal CostsTotal Lives S... View the full answer
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