Lahdekorpi OY, a Finnish corporation, owns 100 percent of Three-O Com­pany, a subsidiary incorporated in the United States. Required:

Given the limited information provided, determine the best transfer pricing method and the appropriate transfer price in each of the following situations:

a. Lahdekorpi manufactures tablecloths at a cost of $20 each and sells them to unrelated distributors in Canada for $30 each. Lahdekorpi sells the same tablecloths to Three-O Company, which then sells them to retail customers in the United States.

b. Three-O Company manufactures men’s flannel shirts at a cost of $10 each and sells them to Lahdekorpi, which sells the shirts in Finland at a retail price of $30 each. Lahdekorpi adds no significant value to the shirts. Finn­ish retailers of men’s clothing normally earn a gross profit of 40 percent on sales price.

c. Lahdekorpi manufacturers wooden puzzles at a cost of $2 each and sells them to Three-O Company for distribution in the United States. Other Finnish puzzle manufacturers sell their product to unrelated customers and normally earn a gross profit equal to 50 percent of the production cost.

Pressure systems, inc., manufactures high-accuracy liquid-level transducers. it is investigating whether it should update certain equipment now or wait to do it later. if the cost now is $200,000, what will the equivalent amount be 3 years from now at an interest rate of 10% per year?

Jameson manages a well-known cell phone company. this company has been voted as having the best cell-phone service. consumers appreciate the fact that they can call from almost anywhere in the world and the service still gets through. jameson knows that the company's product far surpasses that of the competition. one thing has been bothering him, though. in order to put so many resources into ensuring the best service, jameson has cut back on employees at the firm's customer call center. recently, consumers have begun complaining about long wait times when they call in with a problem or concern. although its cell phone service is still considered one of the best, customer satisfaction with the firm's customer service has plummeted. jameson does not understand why consumers are getting so upset. he believes the exceptional cell phone service more than makes up for long waiting periods and other issues with its customer service. "after all," he says, "they can't have it all. if i invest more in customer service, that means less investment on ensuring the quality of our product offering."refer to scenario. jameson has asked you, a marketing consultant, to give him advice. he cannot understand how a cell-phone company with the best product offering in the cell-phone service industry could get such low satisfaction ratings simply because the customer service is not up to par. you suggest that jameson has a narrowly defined view of the company's product offering. you tell jameson that successful marketers should define their products as what they

Is exploiting a distinctive competence or improving efficiency for competitive advantage. (a) cooptation (b) coalition (c) competitive intelligence (d) competitive aggression (e) smoothing