/Multinational transfer pricing, goal-congruence (continuation of 23-21). $uppose that the Canadian division could sell as many units of Product 4A36 as it makes at $720 based on per unit in the Canadian market, net of all marketing and distribution costs.

Required 1. From the viewpoint of the Mornay Company as a whole, would after-tax operating income be maximized ifit sold the 1,000 units ofProduct 4A36 in Canada or in Austria?

2. Suppose each division manager acts autonomously to maximize his or her division’s after-tax operating income. Will the transfer price calculated in requirement 2 of Exercise 23-21 result in the Canadian division manager taking the actions determined to be optimal in requirement 1 ofthis exercise? Explain.

3. What is the minimum transfer price that the Canadian division manager would agree to?

Does this transfer price result in the Alornay Company as a whole paying more import duty and taxes than the answer to requirement 2 of Exercise 23-21? Ifso, by how much?