What will the payback period be for the loan

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Reference no: EM132828752

Cindy is the plant manager from Gemstone, and she has asked you to perform a sound level survey and noise dosimetry in the fabrication shop, which can get pretty noisy when all three mechanical power presses and the 12-foot shear are running at the same time for several hours a day. She also asked that you identify noise level exposures in the adjacent welding department. Your results indicate that the noise levels in the area are just above the Occupational Safety and Health Administration (OSHA) permissible exposure level for an average day in the fabrication department.

The welding department is adjacent to the fabrication department, and there is no separating wall. The welding operations are not quite as noisy, although the crackle of a well-adjusted MIG welder can be rather loud when welding mild steel. Noise monitoring and dosimetry of the welders indicated an exposure of just over OSHA's Action Level of 85 Dba. In addition, you remember taking the survey readings and watching the noise level jump in the welding shop every time the power presses or shear cycled in the fabrication area.

After consulting with fellow industrial hygienists, it was determined that setting up a 12' X 30' noise barrier wall between the fabrication area and the welding area and adding noise absorption panels to both sides of the barrier wall and to the white-painted concrete walls in the fabrication department would decrease the sound levels in the welding area to several decibels below OSHA's Action Level.

Of course, these engineering controls will cost $33,000 dollars. This is compared to a continuing hearing conservation program to include annual audiograms, or hearing tests, annual training, and providing noise protection for the welding department which is estimated to cost $9,000 per year. This amount would be saved each year if the engineering controls are installed.

If the company takes out a loan for $33,000 at 5% interest, what will the payback period be for the loan? Please consult your unit lesson for the necessary formulas. What would be your recommendation to the employer with respect to the options available? Please show your work. Make sure you justify your reasoning and that you consider the hierarchy of controls in your discussion.

Reference no: EM132828752

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