Financial Managers at Parker Computers, an MNC, Want to Decrease

question 29

Multiple Choice

Financial managers at Parker Computers, an MNC, want to decrease the tariffs paid on components imported from Parker's subsidiaries. Which of the following would most likely accomplish this goal?

• A) increasing the internal rate of return offered by the subsidiaries
• B) lowering the transfer price charged by the subsidiaries
• C) engaging in currency swaps with the subsidiaries
• D) raising the transfer prices paid by the subsidiaries

---

Definitions:

ROCE

Return on Capital Employed; a measure of a company's profitability in relation to its capital, indicating how efficiently capital is being utilized to generate profits.

After Tax Cost

The net cost of an investment or financing option after taking into account the effects of taxes.

Financial Leverage

Applying borrowed resources to escalate the potential profits of an investment.

EPS

Earnings Per Share, a measure of a company's profitability that divides its net profit by the number of outstanding shares.