A Firm Should Make a Component Internally Rather Than Contracting

A firm should make a component internally rather than contracting it out to a supplier when:

A) substantial investments in specialized assets can be avoided.
B) the firm uses proprietary product technology that helps in gaining competitive advantage.
C) it wants to reduce the number of subunits in the organization.
D) the optimal location for manufacturing a product is beset by political risks.
E) different tax regimes and exchange rate movements increase the complexity of transfer pricing decisions.