(ii) The sales director has suggested to Damian, that to encourage the salesmen to accept

(ii) The sales director has suggested to Damian, that to encourage the salesmen to accept the new arrangement,

the company should increase the value of the accessories of their own choice that can be fitted to the low

emission cars.

State, giving reasons, whether or not Damian should implement the sales director’s suggestion.

(2 marks)

(ii) Damian should not agree to the sales director’s suggestion. The salesmen will each make a significant annual incometax saving under the proposal, whereas the company will also be offset (at least partly) by the reduction in the dealer’sbulk discount.