Business, 13.03.2020 01:29 amanuelwold

B. Suppose Boeing acquires GE’s engine division. Assume after the acquisition, Boeing turns the engine division into a cost center. The cost center will charge cost when it transfers engines to the assembly plant. This means that the engine division makes no profits, as it is evaluated based on cost, not profits. Under these arrangements how many planes would Boeing sell and at what price? What is Boeing’s profit under these arrangements? Compare this amount of profits to the sum of profits for Boeing and GE that you calculated in part (a) above. What is the difference, and what do you attribute the difference to?

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B. Suppose Boeing acquires GE’s engine division. Assume after the acquisition, Boeing turns the engi...

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