A Condition That Is Conducive to Low Transfer Prices from the Parent

question 85

True/False

A condition that is conducive to low transfer prices from the parent company to the subsidiary and high transfer prices from the subsidiary to the parent company is where the corporate in-come tax is lower in the subsidiary's country than in the parent country.

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Definitions:

Predictability

The characteristic of a process, principle, or system that enables it to be known or declared in advance, especially through the application of scientific or logical techniques.

Probability

A measure of the likelihood that an event will occur, often quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Liberty

The state of being free within society from oppressive restrictions imposed by authority on one's way of life, behavior, or political views.

State

An organized political community living under a government; can also refer to the condition or mode of being.