A university introduced an anti‑cultism policy that costs $N500,000$ per year. Before the policy, there were $30$ cult‑related incidents each semester; after the policy, the number fell to $18$ per semester. Each incident costs the university $N80,000$. The policy also includes a counseling programme that reduces recidivism by $25$% for those caught, saving an additional $N20,000$ for each prevented incident.

Calculate the net financial benefit of the policy per year and state whether the policy is cost‑effective.

Question

A university introduced an anti‑cultism policy that costs $N500,000$ per year. Before the policy, there were $30$ cult‑related incidents each semester; after the policy, the number fell to $18$ per semester. Each incident costs the university $N80,000$. The policy also includes a counseling programme that reduces recidivism by $25$% for those caught, saving an additional $N20,000$ for each prevented incident.

Calculate the net financial benefit of the policy per year and state whether the policy is cost‑effective.

Accepted Answer

Net benefit N1,600,000; the policy is cost‑effective.

Gce Model Questions Vol1 2020 Civic Education Question 38

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