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xz_007 [3.2K]
3 years ago
12

Honda Motor Company is considering offering a $ 1 comma 800 rebate on its​ minivan, lowering the​ vehicle's price from $ 29 comm

a 400 to $ 27 comma 600. The marketing group estimates that this rebate will increase sales over the next year from 39 comma 700 to 53 comma 200 vehicles. Suppose​ Honda's profit margin with the rebate is $ 5 comma 090 per vehicle. If the change in sales is the only consequence of this​ decision, what are its costs and​ benefits? Is it a good​ idea?​ Hint: View this question in terms of incremental profits.
Business
1 answer:
zvonat [6]3 years ago
5 0

Answer:

The cost of the rebate is that Honda will sell more vehicles and lose on each additional vehicle sold.

Explanation:

The cost-benefit analysis is a systematic approach that involves finding the marginal costs and marginal benefits associated with a particular decision, and then compare the benefits against the costs to determine whether the decision should be pursued.

To determine the costs and benefits in terms of incremental profits;

Benefit = Profit of $5,090 per vehicle × 13,500 (53200 - 39700) additional vehicles sold = $68,715,000  

The cost of the rebate is that Honda will make less on the vehicles it would have sold:

Cost = Loss of $1,800 per vehicle × 39,700 vehicles that would have sold without rebate = $71,460,000.

There, Benefit - Cost = $ (68,715,000 - 71,460,000) = - $2,745,000 and offering the rebate does not look attractive.

The rebate being offered is not a good idea as the cost outweighs the benefit.

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For a given set of underlying real estate properties, the type of real estate index that is most likely to have the lowest stand
liberstina [14]

Answer:

The answer is Letter B, appraisal index

Explanation:

Because appraisal index returns are based on estimates of property values.  Estimating values tends to introduce smoothing into returns data, appraisal index returns are likely to have lower standard deviations than index returns based on repeat sales, trading prices or REIT trading price.

5 0
3 years ago
In a closed​ economy, the values for​ gdp, consumption​ spending, investment​ spending, transfer​ payments, and taxes are as​ fo
BartSMP [9]

Answer:

Private saving = $2 trillion

Public saving = $1 trillion

Explanation:

Private saving = GDP - Taxes + Transfer payments - Consumption spending

= Y - T + TR - C

= $11 - $2 + $1 - $8

= $2 trillion

Public saving = Taxes - Government spending - Transfer payments

= T - G - TR

= $2 - $0 - $1

= $1 trillion

Therefore;

Private saving = $2 trillion, Public saving = $1 trillion

3 0
3 years ago
Over time, external monitoring processes should capture information about the external environment in a format that can be refer
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Answer:

True

when monitoring processes are observed when threats emerge the organization will know how to tackle the threats

6 0
3 years ago
You and your friends hike a total of 8 miles to the nearest campsite (Activity A). Upon arriving you break off into teams. One t
IgorLugansk [536]

Answer:

a. The critical path is 16 minutes.

b. The length of time to complete the entire process = 23 minutes.

Explanation:

a) Data and Calculations:

Activity                      Optimistic time   Most Likely Time   Pessimistic Time

                                    to complete         to Complete          to Complete

A Hike to the campsite       3                          5                          8

B Set up campsite               2                          4                          5

C Collect wood for fire        1                          3                          5

D Start a fire                         1                          2                          3

E Find water                        0.5                       1                           3

F Collect water & bring it

back to camp                       1                          2                          4

G Purify the water               1                          2                          4

H Cook and eat dinner       1                          3                          4

I Put out fire                         1                          2                         4

J Dispose of food waste    0.5                      2                          3

K Return from food

 waste disposal                0.25                     1                           2

Total time                         12.25                  27                          45

Critical path: Activity A - Activity B

                     Activity A - Activity C 3 - Activity D 2 - Activity E 1 - Activity F 2

Activity G 2 - Activity H 3 - Activity I and J 2 - Activity K 1

= 3 + 2 + 1 + 2+ 2 + 3 + 2 + 1 = 16 minutes

Length of time to complete the entire process = 27 - 4 = 23

The critical path identifies the longest stretch of dependent activities and measuring the time required to complete them from start to finish.

5 0
2 years ago
Suppose that over the past year, the nominal interest rate was 5 percent, the CPI was 150.3 at the end of the year, and the CPI
makvit [3.9K]

Answer:

The correct answer is option c.

Explanation:

The nominal interest rate was 5 percent.

The CPI was 150.3 at the end of the year, and the CPI was 144.2 at the beginning of the year.

The 5% nominal interest rate means that the dollar value of savings increased at 5%.

Inflation rate

= \frac{(150.3 - 144.2)}{144.2}

= 0.0423 or 4.2%

The real interest rate

= Nominal interest rate - rate of inflation

= 5 - 4.2

= 0.8%

The real interest rate of 0.8% indicates that the purchasing power of savings increased at 0.8%.

3 0
2 years ago
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