Which of the Following Is a Consistently Desirable Characteristic in a Transfer

question 105

Multiple Choice

Which of the following is a consistently desirable characteristic in a transfer pricing system?

• A)system is very complex to be the most fair to the buying and selling units
• B)effect on subunit performance measures is not easily determined
• C)system should reflect organizational goals
• D)transfer price remains constant for a period of at least two years

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Definitions:

Compounded Semi-annually

Interest that is compounded and added to the principal twice per year, emphasizing the process of growth due to reinvestment of interest.

Issue Price

The price at which a new issue of securities is offered to the public.

Strip Bond

A bond where both the principal and regular interest payments have been removed, typically sold at a discount and pays no interest until maturity.

Yield Rate

The income return on an investment, such as the interest or dividends received, expressed annually as a percentage based on the investment's cost, current market value, or face value.