MexSub, a subsidiary of AbroadCo, resells approximately 30,000 stoves that it purchases from its foreign parent company to industrial manufacturing companies. The stoves are neither branded nor warranted. AbroadCo also sells 5,000 industrial stoves to an independent third party in Brazil for $100,000 each. Unlike the industrial stoves sold to MexSub, the industrial stoves sold in Brazil are warranted and bear the valuable AbroadCo label. Suppose that the comparable profits methodology is the best method. Further assume that your search for comparable companies preliminarily includes those on the list below with all return on sales figures being a proper average of the last three taxable years. ● Pause Co. - a distributor of small video recording devices. Return on Sales: (2.5%). ● Cook Co. - a distributor of heavy duty motors that are used in manufacturing commercial grade kitchen equipment. Return on Sales: 5%. ● ShipForward, Inc. - a provider of Ship forwarding services to distribution companies trying to sell products in North America. Return on Sales: 20%. ● Mind Electro - a manufacturer of high-tech gadgets. Return on Sales: 7%. ● Acme - a distributor of heavy manufacturing-oriented equipment. Return on Sales: 5.5%. ● Clear Mount, Inc. - a

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manufacturer of optical lenses Return on Sales 10 To determine the arms length price for the stoves sold by MexSub to industrial manufacturing companies we need to use the comparable profits method Th... View the full answer