QUESTION: Conduct a cost-benefit analysis using NPV and Benefit/Cost Ratio for the following Case:

DIRECT COST : Like any program or incentive implemented in a company, the cost of employee care has a wide range. For example, the average cost of wellness programs per employee per year is anywhere from $150 to $2,000, according to some studies. The average cost of a wellness program was $762 per employee in 2019 (indeed, 2021). The corporate wellness pricing models will vary by vendor, so for Hoops, we are going to look for a discount based on the size of our company. Or it may mean prioritizing our flexibility and adaptability. Based on our research, the wide range of corporate wellness pricing models comes with a wide range in results. Ultimately, the right price will meet the unique needs of our staff today, and grow with us if proven valuable.

Our proposal is to introduce a 3rd party organization that can power a Wellness Dashboard for employees to access the following wellness perks:

• Employees to complete wellness profile
• Nutrition classes (Lunch and learn)
• Enter dates of Primary Physician visit for a wellness check
• Preventative: chronic disease, complete 3 calls with a coach, health screenings, eye screening, and dental screenings
• Meditation/mindfulness/stress management
• Financial wellbeing

The yearly fee to maintain the portal is $40,000 ($200 per employee). The portal will be administered by our current HR Specialist, so the company will save money on indirect costs.

Whats in it for Hoops Inc. Employees?

In addition to achieving your well-being goals, employees can earn incentives in the form of points for participating in the above activities. These points will be converted into money value at the end of the fiscal year.

The following is a list of all indirect costs in order of our LEAP to Wellness Program.

Level	Total Points	Incentive
1 - Beginner	1,000	$50 Payout applied to employees paycheck
2 - Intermediate	2,000	$85 Payout applied to employees paycheck
3- Advanced	3,0000	$115 Payout applied to employees paycheck
4 -Expert	4,0000	$125 Payout applied to employees paycheck

Importance of Wellness Programs

In recent years the push for employee health incentives or gym memberships has continued to increase. A study by SHRM found that 52 percent of workers said they had more energy to be more productive at work by participating in a wellness program (Cashort, 2020). Not only do wellness programs boost productivity, but it can also influence healthcare costs. Wellness programs aim to work as a preventative measure for avoiding illness, while improving or maintaining an employees general health. The healthier employees are, the less days they tend to miss due to illness, as well as reducing their risk for chronic disease or conditions.

Indirect Cost

We all know that indirect costs are things such as accounting and legal expenses, administrative salaries, office expenses, rent, security expenses, telephone expenses, and utilities (basically administrative and facilities cost).

IC Pool

Vacation, Holiday, and Sick Leave - $30,000

Health Insurance - $18,000

Fica Taxes - $26,000

Pension Costs - $30,000

Indirect Salaries - $40,000

Facility Rental Costs - $15,000

Equipment Depreciation - $5,000

Utilities - $3,500

Indirect Supplies - $2,500

Legal Fees - $2,000

Accounting Fees - $2,000

Total Indirect - $174,000