Several Transfer Pricing Policies Are Used in Practice

question 91

Multiple Choice

Several transfer pricing policies are used in practice.These transfer pricing policies include

• A) transfer at market price.
• B) transfer at negotiated price.
• C) transfer at cost.
• D) All of these.

---

Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the interest rate that makes the net present value of all cash flows equal to zero.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to assess the profitability of an investment or project.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Time Value of Money

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.