An Organization That Sells Products to a Foreign Subsidiary Wants

question 18

Multiple Choice

An organization that sells products to a foreign subsidiary wants to charge a price that will decrease import tariffs. Which of the following is the best course of action for the organization?

• A) Decrease the transfer price.
• B) Increase the transfer price.
• C) Charge at the arm's length price.
• D) Charge at the optimal transfer price.

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Definitions:

Commercial Finance Companies

Financial institutions that offer loans to businesses, particularly for equipment or inventory financing.

Leasing Companies

Firms that lease vehicles, equipment, or facilities to businesses or individuals, usually for a fixed period at a specified rate.

Business Credibility

The perception of a business as trustworthy and reliable, often built over time through consistent delivery of quality products or services.

Lending Decision

The process by which a lender evaluates the risk and potential of a loan application before granting funds to the borrower.