There Are Five Possible Methods of Transfer Pricing Between National

question 51

Multiple Choice

There are five possible methods of transfer pricing between national divisions of a company, which are:

• A) sale at the local competitive cost, sale at the local manufacturing cost plus a standard mark-up, sale at the cost of the most efficient producer in the company plus a standard mark-up, sale at negotiated prices on those prevailing in the foreign market and arm's length sales using the same prices as quoted to independent customers.
• B) sale at the local manufacturing cost, sale at the local manufacturing cost plus a standard mark-up, sale at the cost of the most efficient distributor in the company plus a standard mark-up, sale at negotiated prices on those prevailing in the foreign market and arm's length sales using the same prices as quoted to independent customers.
• C) sale at the local manufacturing cost, sale at the local manufacturing cost plus a standard mark-up, sale at the cost of the most efficient producer in the company plus a standard mark-up, sale at competitive prices on those prevailing in the foreign market and arm's length sales using the same prices as quoted to independent customers.
• D) sale at the local manufacturing cost, sale at the local manufacturing cost plus a standard mark-up, sale at the cost of the most efficient producer in the company plus a standard mark-up, sale at negotiated prices on those prevailing in the foreign market and arm's length sales using the same prices as quoted to independent customers.
• E) sale at the local manufacturing cost, sale at the local manufacturing cost plus a standard mark-up, sale at the cost of the most efficient producer in the company plus a standard mark-up, sale at negotiated prices on those prevailing in the foreign market and arm's length sales using the same prices as quoted to dependent customers.

---

Definitions:

Increasing Rate

A situation where the pace or percentage of a certain variable, such as growth, inflation, or interest, is rising.

Decreasing Rate

Decreasing Rate refers to a situation where the rate of growth or rate of increase in a variable is slowing down over time.

M2

A measurement of the total amount of money available that encompasses physical currency, funds in checking accounts, and near-cash assets like savings accounts and money market funds.

Basic Money Supply

The total amount of liquid money available in the economy, including cash and easily accessible deposits.