The Huffman Tire Company Has 3,000 Tires in Its Inventory

Multiple Choice

The Huffman Tire Company has 3,000 tires in its inventory which are considered obsolete.Each unit originally cost the company $35.Management is considering options to reduce these inventory levels.Units can be sold directly to car dealerships for $30 per tire as opposed to the normal selling price of $45 per tire.The other option is to offer their current customers a $10 per tire rebate on their purchase.In addition to the $10 rebate, the program would cost the company approximately $24,000 to manage.They predict that either option will rid them completely of their excess inventory.The decision to sell directly to the car dealerships over offering the rebate will result in:

A) A $21,000 increase in profits.
B) A $9,000 increase in profits.
C) A $15,000 decrease in profits.
D) A $24,000 decrease in profits.