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Essay text:
Also assume in a-c that it is known with certainty beforehand that the repairs will cost $1,594.
a. In your opinion, at what value should this trade-in (unrepaired) be transferred from the new-car department to the used-car department? Why?
b. In your opinion, how much should the service department be able to charge the used-car department for the repairs on this trade-in car?
c. Given your responses to a and b, what will be each department's incremental gross profit on this deal?
Answer 2-a:
i) If Paul should take responsibility that he failed to find the rear axle crack. The value of this trade-in should be at least $5,000, which is the number Paul think he could buy from used car auction...
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