Lumber Division:
Capacity	160000 board feet
Price per board foot	$4.50
Variable production cost per bd. ft.	$1.25
Variable selling cost per bd. ft.	$0.50
Construction Division:
Board feet needed	30000
Outside price paid per bd. ft.	$4

If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs. If current outside sales are 80000 board feet, what is the minimum transfer price that the Lumber Division could accept?

$1.40

$4.50

$1.75

$1.25