Cornwall Company has two divisions, A and B. Information for each division is as follows:

A B

Net earnings for division $ 40,000 $ 260,000

Asset base for division $100,000 $1,200,000

Target rate of return 15% 18%

Margin 10% 20%

Weighted average cost of capital 12% 12%

What is the return on investment for A?

a.18%

b.40%

c.20%

d.15%

Transfer prices are the prices charged

a.for the goods produced by one division to another division that needs these goods.

b.when delivering goods to the customer.

c.when transferring goods to international divisions.

d.for distributing goods from one warehouse to another.