A Transfer Pricing Policy Based on Market Price

question 74

Multiple Choice

A transfer pricing policy based on market price

• A) Maximizes total organizational profit.
• B) Is best because the market price is always objective and easily obtainable.
• C) May result in suboptimal decision making for the company as a whole.
• D) Is the only alternative accepted by the Internal Revenue Service.

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Definitions:

Creativity

The ability to produce original and valuable ideas or to make new things or think of new ideas.

Knowledge

Information, understanding, or skill that one gets through experience or education.

Performance

The act of executing or conducting a task or activity, often measured against a standard of accuracy, completeness, and speed.

Creative

Showing the ability or power to bring new and imaginative ideas into existence; characterized by originality and expressiveness.