Lottery Company Has Two Divisions, One Located in Vancouver and the Other

Lottery Company has two divisions, one located in Vancouver and the other located in Regina. Vancouver sells selected goods to Regina for use in various end products. Assuming that the transfer prices set by Vancouver do not influence the decisions made by the two divisions, which of the following correctly describes the impact of the transfer prices on divisional profits and overall company profit? $\begin{array}{|c|c|c|c|}\hline&\text { Vancouver Profit } & \text { Regina Profit } & \text { Lottery Company Profit } \\\hline1& \text { Affected } & \text { Affected } & \text { Affected } \\\hline 2&\text { Affected } & \text { Affected } & \text { Not affected } \\\hline 3&\text { Affected } & \text { Not affected } & \text { Affected } \\\hline 4&\text { Not affected } & \text { Not affected } & \text { Affected } \\\hline5& \text { Not affected } & \text { Not affected } & \text { Not affected }\\\hline\end{array}$

A) 1
B) 2
C) 3
D) 4
E) 5