What are its benefits and costs and is it a good idea

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Honda Motor Company is considering offering a $1,100 rebate on its minivan, lowering the vehicle's price from $24,000 to $22,900. The marketing group estimates that this rebate will increase sales over the next year from 41,000 to 52,000 vehicles. Suppose Honda's profit margin with the rebate is $6,400 per vehicle. If the change in sales is the only consequence of this decision, (1) what are its benefits and costs? (2) Is it a good idea?

Reference no: EM132014537

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