What is the cost of the rebate

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Reference no: EM13305366

1.) Honda Motor Company is considering offering a $2,000 rebate on its minivan, lowering the vehicle's price from $30,000 to $28,000. The marketing group estimates that this rebate will increase sales over the next year from 40,000 to 50,000 vehicles. Suppose Honda's profit margin with the rebate is $6,000 per vehicle. If the change in sales is the only consequence of this decision, what is the cost of the rebate (in millions of dollars)?

2.)What is the benefit (in millions of dollars)?

Note: Please show how to calculate, I know it's simple but I can't remember.

Reference no: EM13305366

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