In a Time of Distress Prices, Which of the Following

question 107

Multiple Choice

In a time of distress prices, which of the following is true?

• A) The vendor division should set the transfer price at the distress price on a long-term basis for stability within the overall company.
• B) The vendor division should cease production.
• C) The purchasing division should pay normal prices.
• D) In the short-term, the transfer price should be the distress price as long as this exceeds the incremental costs.
• E) The distress price should be ignored as it is a function of the market, not of the internal capacities of the overall company.

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Definitions:

Success Rate

The proportion of attempts that result in success, often used in the context of projects, tests, or operations.

Orientation Program

A training and information session offered to new employees or participants to familiarize them with organizational policies, goals, and procedures.

Point Estimate

A single value (or point) derived from a sample that is used to estimate a population parameter.

Sample Mean

The average value calculated from a sample of data, representing the central tendency.