Rocker U$.$S$.$ manufactures low power, low water consuming commercial dishwashers in Malaysia, through their wholly owned subsidiary $($MalRoc$).$ MalRoc$$s production cost is $$1,650$ per unit. MalRoc uses excess capacity to sell output to independent distributors in the United States for $$2,300.$ MalRoc transfers substantially the same dishwashers to Rocker U$.$S$.$ who then sells them directly to commercial buyers at a price of $$3,500.$ Rocker U$.$S$.$ pays the shipping costs of $$50$ per and is expecting to import $6,000$ units this year. According to trade data, distributors of commercial dishwashers in the U$.$S$.$ normally earn a gross profit equal to $30\%$ of selling price. MalRoc$$s main competitor in the Asian market sells dishwashers at an average $40\%$ markup on cost to produce.

Rocker$$s US income tax rate is $21\%$ while the Malaysian subsidiary$$s tax rate is $15\%.$ Imports of dishwashers from Malaysia into the U$.$S$.$ are subject to a $20\%$ import tariff rate. Malaysia$$s dividend withholding tax rate is $10\%.$ Rocker is planning to repatriate $100\%$ of MalRoc$$s profits back to the U$.$S$.$

Required:

$1.$ The management team for Rocker believes that the net margin method is the least applical of the methods recognized in OECD guidelines. As such, you have been asked to determine possible transfer prices using the $($a$)$ comparable uncontrolled price model, $($b$)$ resale price model, and $($c$)$ cost$-$plus pricing model.

$2.$ Which of the possible transfer prices will maximize consolidated cash flow for the company? You will need to evaluate only the highest and lowest transfer prices from requirement $1$ above. Use the templates on the following pages as a guide.