What is the present value of $29,000 to be received at the end of each of 5 periods, discounted at 8 % 7 (no $, no comma) QUESTION 16 ABC Corporation makes and sells various products. Division A makes a product that it can sell to Division B or to an outside company. The following information is available: Sales price per product #1 Variable cost per product #1 Fixed production cost for product #1 Fixed SG&A costs for product #1 Monthly capacity for product #1 External sales for product #1 Internal sales for product #1 $50 $20 $60,000 $90,000 10,000 Product #1 6,000 Product 1 0 Product #1 Presently, Division #2 purchases nothing from Division #1, but instead pays $45 to an external supplier for the 4,000 items it needs cach month. What is the minimum of the trasfer price range for a possible transfer of the item from one division to the other? QUESTION 17 Freddy Inc. makes car audio systems. It is a divsion of Mercury Automotive which manufactures cars. Freddy Inc, sells systems to other divisions of Mercury Automotive as well as to other vehicle manufacturers and retail stores. The following information is available for Freddy's standard unit: variable cost per unit $31, fixed cost per unit $23, and selling price to outside customers $85. Mercury Automotive currently purchases a standard unit from an outside supplier for $80. Because of quality concerns and to ensure a reliable supply, the top management of Mercury Automotive has ordered Freddy Inc, to provide 200,000 units per year at a transfer price of $30 per unit. Freddy is already operating at full capcity. Freddy can avoid $2 per unit of variable selling costs by selling the unit internally, a. What is the minimum transfer price that Freddy Inc. should accept? b. What is the potential loss to the corporation as a whole resulting from a forced transfer price of $30 per unit