Honda Motor Company is considering offering a $2,200 rebate on its minivan, lowering the vehicle's price from $30,400 to $28,200. The marketing group estimates that this rebate will increase sales over the next year from 39,500 to 53,700 vehicles. Suppose Honda's profit margin with the rebate is $5,600 per vehicle. If the change in sales is the only consequence of this decision, what are its costs and benefits? Is it a good idea? Hint: View this question in terms of incremental profits. The cost of the rebate will be $ million. (Round to one decimal place.) million. (Round to one decimal place.) The benefit of the rebate will be Is it a good idea? (Select from the drop-down menu.) Offering the rebate look attractive.

Honda Motor Company is considering offering a $2,200 rebate on its minivan, lowering the vehicle's price from $30,400 to $28,200. The marketing group estimates that this rebate will increase sales over the next year from 39,500 to 53,700 vehicles. Suppose Honda's profit margin with the rebate is $5,600 per vehicle. If the change in sales is the only consequence of this decision, what are its costs and benefits? Is it a good idea? Hint: View this question in terms of incremental profits. The cost of the rebate will be $ million. (Round to one decimal place.) million. (Round to one decimal place.) The benefit of the rebate will be Is it a good idea? (Select from the drop-down menu.) Offering the rebate look attractive.

Essentials Of Business Analytics

1st Edition

ISBN:9781285187273

Author:Camm, Jeff.

Publisher:Camm, Jeff.

Chapter11: Monte Carlo Simulation

Section: Chapter Questions

Problem 3P

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Honda Motor Company is considering offering a $2,100 rebate on its minivan, lowering the vehicle's price from $29,000 to $26,900. The marketing group estimates that this rebate will increase sales over the next year from 41,500 to 55,400 vehicles. Suppose Honda's profit margin with the rebate is $6,580 per vehicle. If the change in sales is the only consequence of this decision, what are its costs and benefits? Is it a good idea? Hint: View this question in terms of incremental profits The cost of the rebate will be $_____ million. (Round to one decimal place.)
Honda Motor Company is considering offering a $2,100 rebate on its minivan, lowering the vehicle's price from $29,700 to $27,600. The marketing group estimates that this rebate will increase sales over the next year from 42,000 to 55,400 vehicles. Suppose Honda's profit margin with the rebate is $6,600 per vehicle. If the change in sales is the only consequence of this decision, what are its costs and benefits? Is it a good idea? Hint: View this question in terms of incremental profits.
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