Final answer:
The decision to offer a $2000 rebate on Honda's minivan has both costs and benefits. The rebate is expected to increase sales, but it will also decrease Honda's net profit per vehicle.
Step-by-step explanation:
The decision to offer a $2000 rebate on Honda's minivan has both costs and benefits. Let's break it down:
- Benefits: The rebate is expected to increase sales from 40,000 to 55,000 vehicles over the next year. This increase in sales will generate additional revenue for Honda.
- Costs: The cost of the rebate is $2000 per vehicle. Since the profit margin with the rebate is $6000 per vehicle, Honda's net profit per vehicle will decrease by $2000.
To calculate the overall costs and benefits, we'll need to consider the change in sales and the profit margin per vehicle.