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A Manufacturer of Industrial Paper Shredders Can Make Its Machines

Question 37

Essay

A manufacturer of industrial paper shredders can make its machines safer by adding a laser-sensored kill switch to its products. Adding the kill switch costs $17 per machine. The manufacturer estimates that this will prevent 50 injuries for every 30,000 paper shredders sold and that, on average, each injury causes $5,500 of harm. What is the injury cost per paper shredder? Explain whether the manufacturer should or should not add the kill switch to the paper shredder.

Correct Answer:

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The injury cost per paper shredder is 50...

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