Angler Chemical Company currently operates three manufacturing plants in Colorado, Utah, and Arizona. Annual carbon emissions for these plants in the first quarter of 2021 are140,000 metric tons per quarter (or 560,000 metric tons in 2021). Angler management is investigating improved manufacturing techniques that will reduce annual carbon emissions to below 505,000 metric tons so that the company can meet Environmental Protection Agency guidelines in 2022. Costs and benefits are as follows:

Total cost to reduce carbon emissions $14 per metric ton reduced in 2022 below 560,000 metric tons
Fine in 2022 if EPA guidelines are not met $800,000

Angler Management has chosen to use Kaizen budgeting to achieve its goal for carbon emissions.

Required

1. If Angler reduces emissions by 2% each quarter, beginning with the second quarter of 2021, will the company reach its goal of 505,000 metric tons in 2022?
2. What would be the net financial cost or benefit of their plan? Ignore the time value of money.
3. What factors other than cost might weigh into Angler’s decision to carry out this plan? What do you recommend Angler to do?