Tram Inc. and Drury Inc. are two small manufacturing companies that are considering leasing a machine together. If Tram rents the machine on its own, it will cost $40,000. If Drury rents the machine on its own, it will cost $60,000. If they decide to rent the machine together, it will cost them 80,000.

Which of the following is true?

Tram would prefer the stand-alone cost allocation method to the Shapley value cost allocation method

Drury's cost under the Shapley value method would be $60,000

Both companies would be better off using the Shapley value cost allocation method compared with the stand-alone cost allocation method

Drury would prefer the stand-alone cost allocation method to the Shapley value cost allocation method