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Hatton Company (from U.K.) manufactures and sells towels to its American affiliate, which in turn sells the towels to local retailers at a resale price

Hatton Company (from U.K.) manufactures and sells towels to its American affiliate, which in turn sells the towels to local retailers at a resale price of $1,900 per unit. Other American distributors of towels earn an average gross profit margin of 25% on similar sales. Which of the following would be an acceptable transfer price under the Resale Price method?

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