32 Suppose affiliate A sells 10,000 chips monthly to affiliate B at a unit price of $15. A’s tax rate is 45% and B’s tax rate is 55%.

Published by admin at October 16, 2023

Tags

20.32 Suppose affiliate A sells 10,000 chips monthly to affiliate B at a unit price of $15. A’s tax rate is 45% and B’s tax rate is 55%. In addition, B must pay an ad valorem tariff of 12% on its imports. If the transfer price on chips can be set anywhere between $11 and $18, how much can the total monthly cash flow of A and B be increased by switching to the optimal transfer price?

a) $3,000

b) $4,000

c) $1,840

d) $1,380

The correct answer is d) $1,380.

Can you please provide a written solution to this problem as I am not able to solve the question.

32 Suppose affiliate A sells 10,000 chips monthly to affiliate B at a unit price of $15. A’s tax rate is 45% and B’s tax rate is 55%.

"Get 15% discount on your first 3 orders with us" Use the following coupon FIRST15

Related posts

a running track measures 1056 ft per lap. to run 15.0 km how many laps should you run? How do you break the equation down into a solution map?

A local magic shop has a monopoly on the production of magic wands. Each customer wants only one magic wand, and the table below shows each…

A machine produces pipes used in airplanes. The average length of the pipe is 16 inches. The acceptable variance for the length is .3 inches. A…

"Get 15% discount on your first 3 orders with us"
Use the following coupon
FIRST15