Refer to problem 10-A2, number 1 only. Suppose the Geneva division could modify the component at an additional variable cost of CHF 25 per unit and sell the 3,000 units to other customers for CHF 330. Then, would the entire company benefit if the Lucerne division purchased the 3,000 components from outsiders at CHF 300 per unit?
Answer to relevant QuestionsConsider the following data regarding budgeted operations for 20X7 of the Austin division of Texas Products:Average total assetsReceivables ........ $ 220,000Inventories .......... 290,000Plant and equipment, net ..... ...Sophisticated accounting and communications systems aid decentralization. Explain how they accomplish this.Fill in theblanks: “The higher the required rate of return, the higher the price that a company will be willing to pay for cost-saving equipment.” Do you agree? Explain.Study Appendix 11. What are the three components of market (nominal) interest rates?
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