A transfer-pricing method leads to goal congruence when managers: a. act in their own best interest and the decision is in the short-term best interest of the company b. act in their own best interest and the decision is in the long-term best interest of the manager's subunit c. act in their own best interest and the decision is in the long-term best interest of the company d. always act in their own best interest

A transfer-pricing method leads to goal congruence when managers: a. act in their own best interest and the decision is in the short-term best interest of the company b. act in their own best interest and the decision is in the long-term best interest of the manager's subunit c. act in their own best interest and the decision is in the long-term best interest of the company d. always act in their own best interest

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

See similar textbooks

Similar questions

Implementing Price Strategy is the firm readiness to sell the product which would be effective if given an attractive price strategy listed below: a. Customary pricing is when one price is maintained over an extended period of time. Normally the price of the product will not be easily changed. The entrepreneur must consider the price of the product which is affordable to the majority of buyers. ex. A 1-peso candy. b. Variable pricing is when the price responds to cost fluctuations or differences in demand. The entrepreneur must consider the law of demand and supply. If there are sufficient supplies and few demands, the price will increase and vice versa. c. One-price policy is when the price is charged to all customers buying the product or service under similar conditions. The entrepreneur will set one price for all products available for sale even though they differ in design. d. Flexible pricing is based on the customer's ability to negotiate or buying power of the customer. The…
Refer to the payoff table below of profits in ($000). Which decision alternative results from using the Conservative (Pessimestic) Decision Rule? PAYOFF TABLE High Demand Small Medium Large 35 300 550 -10 Moderate Demand 35 150 75 -10 Low Demand Do Nothing O A. Large O B. Do nothing OC. Medium O D. Small O E. Cannot be determined since relative frequencies are missing. 35 50 -45 -10
The sales manager like to have seasonal prices discounted from the regular sales price. He would like to change all his product prices at the same time whenever the season changes. What is the most efficient way to do this? Create a price list called 'regular sales price list' to list the regular sales prices. Whenever Manager wants to have a seasonal price list, he will use the 'regular sales price list' as the base price list and enter a discount factor. Create a price list for the regular sales price. Create a hierarchy called 'seasonal prices' which will be based on the regular sales price list and will give time-based discounts for the season based on a factor Manager enters. Create a price list which will contain the regular sales prices. Define period and volume discounts for the seasonal prices which will contain both the validity periods for the discounts and a factor to calculate the discounts for all items. Create a price list called 'regular sales price list' to list the…
When a price floor is imposed, it has an impact on a market if it is set, O a. at the equilibrium price O b. above the equilibrium price because quantity demanded exceeds quantity supplied O c. above the equilibrium price because quantity supplied exceeds quantity demanded O d. below the equilibrium price because quantity demanded exceeds quantity supplied Price floor is beneficial for O a. Buyers O b. Sellers O c. All of these O d. Government income
Use the following decision criteria to choose how much the firm should supply: Maximax rule Maximin rule Minimax regret criterion (Construct a regret table for this) Equal probability criterion
The flotation cost valuation is significantly affect the accuracy of the investment decision valuation. analyze the extent to which you agree with the statement.
The Company has the oppotunity to introduce a new product. The sales manager believes that the firm could sell 5,000 units per year at 14 per unit for 5 years. The production manager has determined that machinery costing 60,000 and having a 5 year life and no salvage value could be required. The machinery will have an annual fixed cash operating costs of 4,000. Variable cost per unit will be 8. Straight-line depreciation is to be used for both book and tax purposes. The tax rate is 40% and the firm's cost of capital is 14%. What is the Net Present Value of the Investment?
Describe the one external key uncertainty ito of degree of impact and uncertainty on Shoprite Holdings. Out of all the analysis it must be the most uncertain for Shoprite Holdings and highest impact on Shoprite Holdings should it take place. A key uncertainty is stated in opposites e.g., positive/negative or increase/decrease or decline/incline. Shoprite Holdings is a retail and grocery outlet.
NatBike, a bicycle manufacturer, has identified two customer segments; one segment prefers a customized bicycle and is willing to pay a higher price whereas the other is willing to take a standardized bicycle but is more price sensitive. Assume that the cost of manufacturing either bicycle is $200. Demand from the customized segment has a demand curve of d1=20,000-10p1 and demand from the price-sensitive standard segment is d2=40000-30p2 What price should NatBike charge each segment if there is no capacity constraint? What price should NatBike charge each segment if the total available capacity is 20,000 bicycles? What is the total profit in each case?
A monopolist's total cost is TC = 4.5Q, where Q is output. Demand is Q = 10 - P , where P is price. When the monopolist chooses the profit maximizing Q*, the profit earned is
When is the characterization of optimal policies used?
Hair Zone manufactures a brand of hair-styling gel. It is considering adding a modifiedversion of the product—a foam that provides stronger hold. Hair Zone’s variable costs and prices to wholesalers are: Current Hair Gel New Foam Product Unit selling price 2.00 2.25 Unit variable costs . 85 1.25Hair Zone expects to sell 1 million units of the new styling foam in the first year after introduction, but it expects that 60% of those sales will come from buyers who normally purchase Hair Zone’s styling gel. Hair Zone estimates that it would sell 1.5 million units of the gel if it did not introduce the foam. If the fixed cost of launching the new foam will be $100,000 during the first year, should Hair Zone add the newproduct to its line? Why or why not?