Why Is Transfer Pricing Important

question 55

Multiple Choice

Why is transfer pricing important?

• A)It plays a key role in determining the ultimate profitability of the company as a whole.
• B)It plays a key role in determining the profitability of the division that sells the product.
• C)It plays a key role in determining the profitability of the division that buys the product.
• D)It plays a key role in determining the profitability of both the selling and buying divisions of the company.

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Definitions:

Arson

The willful and malicious burning of a building (and, in some states, personal property) owned by another. Arson statutes have been extended to cover the destruction of any building, regardless of ownership, by fire or explosion.

Convicted

The act of being declared guilty of a crime by the verdict of a jury or the decision of a judge in a court of law.

Felony

A crime—such as arson, murder, assault, or robbery—that carries the most severe sanctions. Sanctions range from one year in a state or federal prison to the death penalty.

Felony

A serious crime, typically involving violence, punishable by imprisonment for more than one year or by death.