In Reference to Establishing "Transfer Prices" Between the Affiliates of an MNC,which

question 40

Multiple Choice

In reference to establishing "transfer prices" between the affiliates of an MNC,which of the following relates to the "resale" price approach?

• A)Comparable uncontrolled price between unrelated firms.
• B)The price at which the good is resold by the distribution affiliate is reduced by an amount to cover overhead costs and a reasonable profit.
• C)Assumes that the manufacturing cost is readily available.
• D)Is based on financial and economic models and econometric techniques.

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Definitions:

Anaerobic Breakdown

The process of generating energy in cells in the absence of oxygen, producing substances such as lactate.

ATP

Adenosine triphosphate is a compound that transports energy within cells to fuel metabolic processes.

Aerobic Respiration

The process of producing cellular energy involving oxygen, converting glucose and oxygen into carbon dioxide and water, and releasing energy.

Nutrients

Substances needed by organisms to survive, grow, and reproduce, which are obtained from food.