Discuss the below:
Expected values and estimating the cost of a life saved
Q: If it costs $600 per car or truck to install seat belts and all people are required to use them when in the vehicle, what is the cost of each life saved if the use of a seat belt reduces the probability of being killed by 50%. Assume that 0.6 of the present 25,000 vehicle occupants killed in collisions were not wearing seat belts. There are about 170 million registered cars and trucks on the highway today.
Hint: The key point here is that the average car life is 10 years, and you must figure all quantities on a yearly basis in solving this problem.