Free Riders Inc. is considering adding a scooter to its motorcycle lineup. Management will negotiate the price of the scooter with its manufacturer.

Management of Free Riders believes the scooters can be sold to its customers for $$4,000$ each. At that price, annual sales of the scooters should be $200$ units. If the scooters are added to Free Riders$$ product lines, the company will have to invest $$200,000$ in inventories and special warehouse fixtures. The variable cost of selling the scooters will be $$1,000$ per unit.

Required:

$1.$ If Free Riders requires a $20\%$ ROI, what is the maximum amount the company would be willing to pay the manufacturer for the scooters?