The USIRS Allows Transfer Prices to Be Set Using the Resale

question 28

Multiple Choice

The U.S.IRS allows transfer prices to be set using the resale price method.This method requires

• A)finding the price that an unrelated willing seller would accept from an unrelated willing buyer.
• B)the price at which the good is resold by the distribution affiliate is reduced by an amount sufficient to cover overhead costs and a reasonable profit.
• C)an appropriate profit is added to the cost of the manufacturing affiliate.
• D)financial models and econometric techniques.

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Definitions:

Intimacy Equilibrium Theory

The theory that relationships are maintained through a balance of personal disclosures and closeness, adjusting the level of intimacy to maintain relational stability.

Back-Channel Communication

Verbal and non-verbal ways in which listeners let speakers know they are still listening.

Impression Management

The effort to control or influence the perceptions others have of us, often through the manipulation of information in social interactions.

Intimacy Equilibrium

The balance between the need for closeness and personal space in interpersonal relationships.