A Division of Sarge Company Is Located in a Country

question 3

Multiple Choice

A division of Sarge Company is located in a country that places restrictions on the amount of funds that may be paid as dividends to foreign owners. If Sarge Company wishes to maximize the amount of cash received from the foreign division, Sarge Company should:

• A) establish a low transfer price of goods transferred into the country
• B) establish a high transfer price of goods transferred out of the country
• C) establish a high transfer price of goods transferred into the country
• D) establish a low transfer price of goods transferred out of the country

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Definitions:

Regardless Of Income

A principle or condition where income does not affect one's eligibility, access to resources, or treatment in a given scenario.

Nonprice Rationing

The distribution of goods and services based on criteria other than price, such as waiting times or quotas.

Health Care Insurance

A type of insurance that covers the whole or part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons.

Health Care Resources

The total means available for preventing, diagnosing, and treating illness, which include medical personnel, facilities, equipment, and pharmaceuticals.