In General, If a Potential Transfer Has No Effect on Divisional

question 30

Multiple Choice

In general, if a potential transfer has no effect on divisional profits:

• A) no transfer will take place between the divisions.
• B) managers will be indifferent between making the transfer or not.
• C) the organization should not intervene to force a transfer.
• D) the optimal transfer price is the opportunity cost for the buying division.

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Definitions:

NAFTA

The North American Free Trade Agreement, which was an agreement among the United States, Canada, and Mexico designed to remove tariff barriers between the respective countries.

Trade Agreement

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European Union

A political and economic union of 27 European countries that are located primarily in Europe, established to promote integration and economic cooperation among its members.

Global Marketing Environment

A complex framework consisting of external factors in international markets that affect a company's marketing strategy and performance.