Heavy Duty Company, a Manufacturer of Power Tools, Decides to Offer

Multiple Choice

Heavy Duty Company, a manufacturer of power tools, decides to offer a rebate of $130 on its 16-inch mid-range chain saw, which currently has a retail price $490. Heavy Duty's marketers 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 Heavy Duty before the rebate is $180. Based on the given information, is the decision to give the rebate a wise one?

A) No, since costs are $7,800,000 more than benefits.
B) No, since costs are $6,800,000 more than benefits.
C) Yes, since the benefits are $3,400,000 more than the costs.
D) Yes, since the benefits are $7,300,000 more than the costs.