Question #1a) What is a “transfer price?â€b) List and describe 3 main reasons for using transfer prices.Question #2Consider the following information about a potential project:Investment requiredExpected annual project revenueExpected annual project expensesRequired rate of returnCurrent division return on investment$3,000,000$6,000,000$5,550,00011%18%a) Calculate the project’s return on investment.b) Based solely on ROI, is this project in the firm’s best interests? Why or why not?c) Is this project in the division manager’s best interests? Why or why not?d) Perform DuPont Analysis on this project.e) What is the project’s residual income?Question #3List and describe five traits that can differentiate a customer that is relatively inexpensive to service from a customer that is relatively expensive to service.Question #4List and describe five actions a firm can take if a customer appears to be unprofitable.Question #5Consider the following quality cost report:Prevention costsAppraisal costsInternal failure costsExternal failure costsTotal quality costsTotal revenuesQ1$530$430$620$875$2,455$55,000Q2$825$475$550$725$2,575$56,000Q3$775$420$450$500$2,145$65,000Q4$650$360$350$350$1,710$66,000Do you believe this firm’s quality initiatives have been successful? Be sure to justify your opinion with specific information.
