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charge Compaq Asia or unrelated subcontractors for this rework
activity. Petitioner, however, adjusted the uncontrolled price
by the full amount of Compaq U.S. rework costs on Compaq Asia
PCA's, decreasing the Compaq Asia aggregate price by the
$1.3 million of rework of defective PCA's.
Differences in payment terms also affect price, but an
adjustment can be made to make controlled and uncontrolled sales
comparable. In this case, Compaq U.S. paid unrelated
subcontractors in 30.3 days and paid Compaq Asia in 90.9 days.
Using the contemporaneous monthly prime rate, the payment term
adjustment sought by petitioner would increase the Compaq Asia
aggregate price by $8.9 million.
Only one adjustment is necessary for the intangible property
associated with the controlled and uncontrolled transactions.
Compaq U.S. purchased power supplies from unrelated
subcontractors and Compaq Asia. Unlike unrelated subcontractors
such as IEC and Citizen, which merely built power supplies to
Compaq U.S. specifications, Compaq Asia had joint design
responsibilities for power supplies with Compaq U.S. Thus, all
things being equal, Compaq Asia should have been paid more than
the unrelated subcontractors for the services provided to Compaq
U.S. The uncontroverted evidence establishes that, in the power
supply sector of the PCA industry, power supply design services
add approximately 5 percent over and above the price to have
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