Answer:
As the benefit of offering the rebate is $21,240,000 ($93,600,000 - $72,360,000) higher than the cost of rebate, the opportunity is beneficial for the company.
Explanation:
Here, the rebate offering of considered as an opportunity to increase the profits. The rebate given in the question is $1800.
<u>1. Cost of the Opportunity:</u>
The cost of the rebate offering = 40,200 Units * $1,800 per unit
The cost of the rebate offering = $72,360,000
<u>2. Benefit of the Opportunity:</u>
The benefit of the opportunity = (Additional Units sold * Profit without rebate)
<u>Here,</u>
Additional units sold are 14,400 Units (54,600 - 40,200).
Profit Margin with rebate is $6500
Now, by putting values, we have:
The benefit of the opportunity = 14,400 Units * $6,500 = $93,600,000
<u></u>
As the benefit of offering the rebate is $21,240,000 ($93,600,000 - $72,360,000) higher than the cost of rebate, the opportunity is beneficial for the company.
