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Talbot Inc. and Bettie Inc. are two small manufacturing companies that are considering leasing a cutting machine together. If Talbot rents the machine on its
Talbot Inc. and Bettie Inc. are two small manufacturing companies that are considering leasing a cutting machine together. If Talbot rents the machine on its own, it will cost $25,000. If Bettie rents the machine alone, it will cost $15,000. If they rent the machine together, the cost will decrease to $35,000. Read the requirements. Requirement 1. Calculate Talbot's and Bettie's respective share of fees under the stand-alone cost-allocation method. Bettie Talbot Stand-alone Requirement 2. Calculate Talbot's and Bettie's respective share of fees using the incremental cost-allocation method assuming (a) Talbot is the primary party (b) Bettie is the primary party. Bettie Talbot Incremental Requirements Talbot primary user Bettie primary user 1. Calculate Talbot's and Bettie's respective share of fees under the Requirement 3. Calculate Talbot's and Bettie's respective share of fees using the Shapley value method. stand-alone cost-allocation method. 2. Calculate Talbot's and Bettie's respective share of fees using the incremental cost-allocation method assuming (a) Talbot is the primary party (b) Bettie is the primary party. Talbot Bettie Shapley 3. Calculate Talbot's and Bettie's respective share of fees using the Shapley Requirement 4. Which method would you recommend Talbot and Bettie use to share the fees? value method. 4. Which method would you recommend Talbot and Bettie use to share the fees? I would recommend the
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