High - Performance Motors, Inc., operates as a decentralized multidivision company. TheVanelli division ofHighPerformance Motors purchases most of its airbags from the airbag division. The airbagdivision's incremental cost for manufacturing the airbags is$140 per unit. The airbag division is currently working at

70% of capacity. The current market price of the airbags is$170 per unit.

1.	What is the minimum price at which the airbag division would sell airbags to the Vanelli division?
2.	Suppose that HighPerformance Motors requires that whenever divisions with unused capacity sell productsinternally, they must do so at the incremental cost. Evaluate thistransfer-pricing policy using the criteria of goalcongruence, evaluating divisionperformance, motivating managementeffort, and preserving division autonomy.
3.	If the two divisions were to negotiate a transferprice, what is the range of possible transferprices? Evaluate this negotiatedtransfer-pricing policy using the criteria of goalcongruence, evaluating divisionperformance, motivating managementeffort, and preserving division autonomy.
4.	Instead of allowingnegotiation, suppose that HighPerformance specifies a hybrid transfer price that"splits thedifference" between the minimum and maximum prices from thedivisions' standpoint. What would be the resulting transfer price forairbags?