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Due to Transfer-Pricing Problems, Multinational Corporations Must Shift Profits Away

question 67

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Due to transfer-pricing problems, multinational corporations must shift profits away from countries with low corporate tax rates to high tax-rate countries, thus absorbing a larger tax bite.


Definitions:

Machine-Hours

A measure of the amount of time machines are used in the production process, often related to the allocation of manufacturing overhead.

Direct Labor-Hours

The total hours of labor directly involved in the production of goods or services, used as a basis for assigning labor costs to products.

Forming

A manufacturing process that involves shaping and combining materials to create a product.

Customizing

The process of modifying products or services to meet specific customer needs or preferences.

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