The Honda Motor Company considers a price discount of EUR 2,000 for the Minivan to push the sales volume. The listed price before this sales campaign is EUR 30,000 and the profit margin EUR 6,000. The sales department estimates a sales increase from 40,000 units to 55,000 units in the coming year due to this price cut. Is the campaign a good idea assuming a WACC of 10 % and an interest rate for debt of 5%?

Answer rating: 100% (QA)

The campaign is a good idea if the company s weighted ... View the full answer