Decision Making in a Decentralized Operation. Richardson Company is planning to build its own office building. The company has a division which constructs all buildings for the entire company. This division has requested bids on the elevators for the building from two companies. O Company gives a bid of \(\$ 4,500,000\), and U Company bids \(\$ 4,000,000\). However, O Company would buy materials for the elevators from the Fabricating Division of the Richardson Company. This order would result in the Fabricating Division earning \(\$ 600,000\) after covering all costs. Since Richardson Company is decentralized, the Construction Division is not aware of this possibility.

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Which bid would you expect the Construction Division to take? Which bid would Richardson Company prefer to have the Construction Division accept? Show calculations.