It has been said that the only thing worse than having a problem is to have a problem and not be aware that you have it!

The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can.

Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept? a) $0.30 b) $0.32 c) $0.22 d) $0.24

By dividing the net operating income (NOI) generated by an income-producing property by the price paid or offered for a property, a buyer can determine the:

a. capitalization rate (cap rate). b. gross rent multiplier (GRM). c. net spendable income. d. capital basis.