Which of the Following Is an Incentive for Managers Who

question 140

Multiple Choice

Which of the following is an incentive for managers who must deal with different tax rates in international markets?

• A) Choose high transfer prices when goods are transferred to profit centers in a country with a low tax rate.
• B) Choose high transfer prices when goods are transferred to profit centers in a country with a high tax rate.
• C) Choose low transfer prices when goods are transferred to profit centers in a country with a high tax rate.
• D) Avoid transferring goods to foreign countries to avoid tariffs.

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Definitions:

Compounded Annually

Interest calculation method where the interest is added to the principal sum at the end of each year, so that the balance also earns interest in the following year.

Yearly Contributions

Refers to the payments or investments made annually into a plan or fund, often for retirement or savings purposes.

Interest Rate

The cost of borrowing money or the return on investment, usually expressed as a percentage of the principal amount per period of time.

Borrower's Payment

The amount of money paid by a borrower, typically on a regular schedule, to repay or service a debt.