The Stake Division of the Outdoor Lumination Company produces stakes which can be sold to outside customers or transferred to the Solar Light Division of the Outdoor Lumination Company. Last year, the Solar Light Division bought 98,000 stakes from the Stake Division at $3.95 each. The following data are available for last year's activities in the Stake Division:

Capacity in units		460,000	stakes
Quantity sold to outside customers		362,000	stakes
Selling price per stake to outside customers	$	4.20
Total variable costs per stake	$	3.50
Fixed operating costs	$	320,000

In order to sell 98,000 stakes to the Solar Light Division, the Stake Division must give up sales of 77,000 stakes to outside customers. That is, the Stake Division could sell 439,000 stakes each year to outside customers (rather than only 362,000 stakes as shown above) if it were not making sales to the Solar Light Division. According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

$4.20.

$4.05.

$3.50.

$3.95.