Suppose that the U. S. division could sell as many broadband routers as it makes at $

Question:

Suppose that the U. S. division could sell as many broadband routers as it makes at $ 450 per unit in the U. S. market, net of all marketing and distribution costs.

Required

1. From the viewpoint of the Questron Company as a whole, would after- tax operating income be maximized if it sold the 100,000 routers in the United States or in Germany? Show your computations.

2. Suppose division managers act autonomously to maximize their division’s after- tax operating income. Will the transfer price calculated in requirement 2 in Exercise 15- 18 result in the U. S. division manager taking the actions determined to be optimal in requirement 1 of this exercise? Explain.

3. What is the minimum transfer price that the U. S. division manager would agree to? Does this transfer price result in the Questron Company as a whole paying more import duty and taxes than the answer to requirement 2 in Exercise 15- 18? If so, by how much?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...