Karina Inc. and Michelle Inc. are two small clothing companies that are considering leasing an embroidery machine together. The company estimated that in order to meet production, Karina need the machine for 700 hours and Michelle needs it for 300 hours. If each company rents the machine on its own, the fee will be $80 per hour of usage. If they rent the machine together, the fee will decrease to $55 per hour of usage.

1. Calculate Karina and Michelle's respective share of fees under the stand-alone cost- allocation method

2. Calculate Karina and Michelle's respective share of fees using the incremental cost- allocation method.

3. Calculate Karina and Michelle's respective share of fees using the Shapley value method. 4. Which method would you recommend Karina and Michelle use to share the fees? Why?