Elite Inchas Many Divisions That Are Evaluated on the Basis of of Return

question 39

Multiple Choice

Elite Inc.has many divisions that are evaluated on the basis of return on investment (ROI) .One division, Beta, makes boxes.A second division, Lambda, makes chocolates and needs 90,000 boxes per year.Beta incurs the following costs for one box:

Beta has the capacity to make 720,000 boxes per year.Lambda currently buys its boxes from an outside supplier for $2.00 each (the same price that Beta receives) .
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Assume that Elite Inc.allows division managers to negotiate transfer price.Beta is producing 650,000 boxes.If Beta and Lambda agree to transfer boxes, what is the ceiling of the bargaining range and which division sets it?

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Definitions:

Tolerance

The need to take increasing amounts of a drug to get the same effect.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes.

Dopamine Dependence

A condition where an individual's normal neurobiological reward system becomes excessively reliant on activities or substances that significantly increase dopamine levels.

Serotonin Dependence

A condition not widely recognized in medical terminology, but may refer to a reliance on mechanisms that enhance serotonin levels to regulate mood.