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In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of
In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. What is the highest acceptable transfer price from the perspective of the buying division? What is the lowest acceptable transfer price from the perspective of the selling division
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