Q.69. Sonic Inc., a manufacturer of power tools, decides to offer a rebate of $120 on its 16-inch mid-range chain saw, which currently has a retail price $520. Sonic Inc. estimate that, as a result of the rebate, sales of this model will increase from 60,000 to 80,000 units next year. The profit margin for Benson before the rebate is $180. Based on the given information, does it make sense for Sonic Inc. to offer the rebate? A. No, since costs are $6,000,000 more than benefits. B. No, since costs are $6,800,000 more than benefits. D. Yes, since the benefits are $7,300,000 more than the costs. C. Yes, since the benefits are $3,400,000 more than the costs. E. The answer cannot be determined based on the information given.
Q.69.
Sonic Inc., a manufacturer of power tools, decides to offer a rebate of $120 on its 16-inch mid-range chain saw, which currently has a retail price $520. Sonic Inc. estimate that, as a result of the rebate, sales of this model will increase from 60,000 to 80,000 units next year. The profit margin for Benson before the rebate is $180.
Based on the given information, does it make sense for Sonic Inc. to offer the rebate?
A. No, since costs are $6,000,000 more than benefits.
B. No, since costs are $6,800,000 more than benefits.
D. Yes, since the benefits are $7,300,000 more than the costs.
C. Yes, since the benefits are $3,400,000 more than the costs.
E. The answer cannot be determined based on the information given.
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