One Disadvantage of Using Market Prices as Transfer Prices Between

question 27

True/False

One disadvantage of using market prices as transfer prices between subsidiaries of a large company is that some subsidiaries may buy their materials from outside companies when, for the group as a whole, it would be better if they bought from other members of the group.

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Definitions:

Periodic Deposit Investment

An investment strategy involving regular, fixed-amount contributions into an investment account.

Simple Interest

Interest that is calculated on the principal in an account, using the formula I = prt.

Checking Account

A checking account is a bank account that allows for easy access to funds through checks, debit cards, and electronic transfers, used primarily for daily transactions.

ATM Withdrawal

The act of taking out cash from one's bank account through an Automated Teller Machine.