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

Aeuropean aircraft producer has spent 15 years in developing a new aircraft that would potential threaten long-lasting boeing's dominance (monopoly) in the same class of aircrafts. the new european aircraft gets high marks on all performance measures except noise. because of the noise, the european producers management is concerned that the us government may impose restrictions which would forbid their aircraft to land in some of the american airports. without restrictions the estimated (present discounted) profit would be 125 million usd. with the restrictions the profit would only be 25 million usd. the chances of both outcomes are estimated to be 50-50. management must decide now whether to the cost of redesign program problem and a 60% chance it will fail. should the european aircraft producer start the noise redesign program if they do not have any redesign parts of the aircraft to solve the noise problem. is 25 million usd. there is a 40% chance that redesign will solve the noise additional information than mentioned above? draw the decision tree, indicate probabilities and outcomes of the events * imagine that the company could find out in advance the outcome of the u. s. government's e find the expected value of perfect information about the u. s. government's decision. decision. draw a new decision tree, indicate probabilities and outcomes of the events.