Toys for Boys have 10,000 toy cars painted a gray color that are not selling well. The selling price of the cars could be reduced from the current price of $8 to $5 each. Alternatively, the cars could be painted red at a cost of $2 each and sold for $8. Red cars sell very well.

REQUIRED

A. Should Toys for Boys paint the cars? Show your calculations.

B. Which option seems to have less business risk? Discuss.