All of the Following Are Correct Statements About the Market-Based

question 131

Multiple Choice

All of the following are correct statements about the market-based approach except that it

• A) assumes that the transfer price should be based on the most objective inputs possible.
• B) provides a fairer allocation of the company's contribution margin to each division.
• C) produces a higher company contribution margin than the cost-based approach.
• D) ensures that each division manager is properly motivated and rewarded.

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Definitions:

Attaches

In legal parlance, attaches means to legally seize or take control of property, often in the context of securing a debt or executing a court order.

Equity Of Redemption

The right of a mortgagor to reclaim property by paying off the full amount of the mortgage plus any accrued interest and costs before foreclosure.

Home Equity Loan

A line of credit made available to homeowners based on the value of the property over and above any existing mortgages.

Court Action

Legal proceedings initiated in a court of law where a plaintiff brings a lawsuit against a defendant.