[gameprogrammer] Fire on the first day?

I hired a graphics programmer for my 3D space game. He sounded smart in the interview and sounded like he had a good background. His first assignment was to develop an explosion system for a giant carrier.
When pressed on how he would do this, he said he would place explosion billboards randomly inside the bounding rectangle of the carrier. When asked why this would work, he said it would work because my test carrier was a giant (hollow) rectangle.
For those that don't know it, the bounding rectangle of an object is the rectangle that encloses the maximum extents of the object, and unless the object really is a rectangle will have space outside of the object too.
My immediate reaction, and maybe I'm wrong, was that his answer was so obviously wrong no graphics programmer could ever give it. Even non-programmers should know better. Did he actually think our final art was going to be flying rectangles? Or did just not think things through? Either way, I should just fire him immediately.
On the other hand, I don't want to be an ogre that fires someone just for asking a question. I always hated jobs where I had to spend hours figuring stuff out because someone couldn't spare 5 minutes to answer something.
Firing now will cost $200 and the time I spent interviewing. Waiting will cost me $1000 and that time, but has a chance that he will work out in the end. 

What should I do?

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