All of the Following Are Correct Statements About Transfers Between

question 6

Multiple Choice

All of the following are correct statements about transfers between divisions located in countries with different tax rates EXCEPT that

• A)differences in tax rates across countries complicate the determination of the appropriate transfer price.
• B)many companies prefer to report more income in countries with low tax rates.
• C)companies must pay income tax in the country where income is generated.
• D)a decreasing number of transfers are between divisions located in different countries.

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Definitions:

Adjacent Side

In a right-angled triangle, the side that is next to the angle of interest and forms one side of that angle.

Opposite Side

Typically refers to the side that is diametrically opposed to a referenced side or point, often used in geometrical contexts or discussions of relative positions.

Cosine

In trigonometry, it is the ratio of the adjacent side of the angle and the hypotenuse.

Adjacent

Next to or beside.