You have been asked to estimate the program cost value per life saved of a program...
You have been asked to estimate the program cost value per life saved of a program intended to place an armed security guard in every public school in the United States. Limit your analysis to first 30 years of the program’s life. Use the following assumptions to perform your calculations.
- Total public schools (excluding college and university) = 98,817
- Security guards per school = 1.7
- Annual compensation per guard = $35,000 ($28,000 salary and $7,000 benefits)
- Annual % increase in compensation = 2% salary and 5% benefits
- Average number of school shooting deaths per annum = 14
- Expected annual % reduction in school shooting deaths = 50%
- Accidental school shooting deaths per annum = 0
- Total guns in the U.S. = 393,000,000
- Discount rate = 3% annualized
Please answer the following questions.
- What is the estimated annual requirement for the total number of security guards?
- What is the first-year total compensation cost for the required number of security guards?
- What is the undiscounted total compensation cost for the required number of security guards, i.e. the 30 year total cost? Please show the component cost attributable to salary, benefits and the total.
- What excel formula would you use to calculate the discounted, present value of the first 30 years of total compensation cost? Use a 3% annual discount rate.
- What is the discounted, present value of the total compensation cost?
- How many lives will be saved over the course of the first 30 years of the program and what is the present value of total compensation cost per total life saved?
- Without putting down amounts can you think of any other direct or indirect costs, beyond security guard salary and benefits, which might be associated with this program?
Homework Answers
A. 167989
B. 5879611500
C. total compensation cost for 30 years
Salary - 190818276022
Benefits - 78126571628
Total - 268944847650
D.
E. discounted, present value of the total compensation cost = 170203858199
F . Lives will be saved over the course of the first 30 years of the program = 48
Present value of total compensation cost per total life saved = 1659783
G. TRAINING PROGRAM COST, ADMINISTRATION COST, KEY MAN INSURANCE / EMPLOYEES GROUP INSURANCE COST
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