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motor home owner, such as a leader or organizer of a motor home
association or club. Petitioner felt that having that person own
a Foretravel coach could influence other members of that
association or club to do the same. To maintain customer
goodwill, petitioner would authorize a special deal or a
favorable trade on another Foretravel model when a customer
returned a coach and complained of poor quality. To alleviate
temporary cash-flow problems, petitioner might allow a dealer to
sell a new or used coach financed by petitioner at a discount in
order to generate cash-flow to petitioner. To maintain its
reputation as a top quality or "highline" coach manufacturer,
petitioner established relatively high wholesale and suggested
retail prices. The yearend incentive payments allowed petitioner
to maintain its position in the public's eye as a top quality
coach manufacturer while reducing the wholesale cost of the coach
to the dealer when necessary. Petitioner also believed that a
firm wholesale price provided salespeople with a floor that they
could use to negotiate with customers.
Petitioner took all of the various factors discussed above
into account when determining the incentive payment for the
dealerships. Petitioner had no written policy as to the amount
of the incentive paid to each dealer. Franklin and Moore
discussed throughout the year the various transactions that would
give rise to a rebate. At the end of petitioner's fiscal year,
Franklin again discussed the various transactions with Moore, and
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