Valve company has offered to sell motor 10,000 units of part m-l for $16.50 per unit. if motor accepts the offer, some of the facilities presently used to manufacture part m-l could be rented to a third party at an annual rental of $15,000. additionally, $4 per unit of the fixed overhead applied to part m-l would be totally eliminated. should motor company accept valve company's offer, and why?

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.