An aluminium refinery in Gladstone is planning to implement an environmental management project. The project is to purchase new equipment that will lower operating costs and reduce emissions from the refinery, which are currently spread over nearby residential districts.

Additional costsCost savingsReduction in emissions

(tonnes of airborne particles)

Initial outlay$578 000

Year 1289 000$41 00050

Year 2260 00041 00050

Year 3250 00041 00050

Year 4250 00041 00050

Year 5250 00041 00050

It is estimated that each tonne of emissions currently causes health costs that average $2 per annum for each of Gladstone's 50 000 residents.

Required:

1. Calculate the net financial cost to the refinery of investing in the new equipment.

2. Calculate the financial cost or benefit to the community over the five years.

3. What other information might you need to gather in order to undertake a more comprehensive analysis of the project?