Suppose that Ford Motor sells 100 trucks per month to its Mexican subsidiary at a transfer price

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Suppose that Ford Motor sells 100 trucks per month to its Mexican subsidiary at a transfer price of $$27,000$ per unit. Ford Motor is allowed to set its transfer price at any level between $$25,000$ and \($30,000.

(a)\) At what transfer price will Ford Motor move the maximum amount of funds from Mexico? Explain.

(b) At what transfer price will Ford Motor bolster the subsidiary’s financial condition most?

Explain.

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Global Corporate Finance Text And Cases

ISBN: 9781405119900

6th Edition

Authors: Suk H. Kim, Seung H. Kim

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Question Posted: May 23, 2024 02:02 AM

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Suppose that Ford Motor sells 100 trucks per month to its Mexican subsidiary at a transfer price

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Global Corporate Finance Text And Cases

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