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Honda Motor Company is considering offering a $2,200 rebate on its minivan, lowering the vehicles price from $30,900 to $28,700. The marketing group estimates that this rebate will increase sales over the next year from 40,800 to 53,200 vehicles. Suppose Hondas profit margin with the rebate is $5,060 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 S 89.76 million. (Round to one decimal place.) The benefit of the rebate will be Sllion. (Round to one decimal place.)

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Home nert Page Layout Formulas Data Review View dd-Ins as Cut ta copy ▼ Σ AutoSum ー E ゴWrap Text General B า 프 . Ej-., Δ. : r_一 逻锂函Merge & Center. $, % , 弼,8 Paste Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard BH203 BA Font Alignment Number Styles Cells BC BD BE BF BG BH BI BJ 194 195 196 197 198 199 200 201 202 203 204 205 ANS 1 COST OF REBATE = 206 ANS 2 BENEFIT OF REBATE 207 208 ANS3 NO, IT IS NOT A GOOD IDEA 209 210 211 212 1 , CASH BUDGET bud BENEFIT= PROFİT WITH REBATE X ADDITIONAL VEHICLES SOLD wITH REBATE 5060 X (53200-40800) 62744000 BENEFIT = 62.744 BENEFIT 62.7 MILLION COST COST OF REBATEX NO OF VEHICLES SOLD WITHOUT REBATE 89760000 89.76 2200 X 40800 = COST = COST = 89.8 MILLION 89.8 MILLION 62.7 MILLION 27.0 MILLION (62.744-89.76) MILLION IN TERMS OF INCREMENTAL PROFIT BENEFIT X NO OF VEHICLES SOLD WITH REBATE (5060 X 53200) (7260 X 40800)- INCREMENTAL PROFIT BENEFIT X NO OF VEHICLES SOLD WITHOUT REBATE 27016000 27.0 MILLION 45 d BV MV ratio VARIANCE BEP, OL FL ratios B-S t loss SALES BUDGET DİFF ANALYSIS overhead float | ORDER E14 erences: EV23 02:24 21-01-2019

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