"Unbundling Fund Transfers" from an MNC and to Its Affiliates

question 59

Multiple Choice

"Unbundling fund transfers" from an MNC and to its affiliates refers to the following activity:

• A)instead of lumping all costs into a single transfer price, for the MNC (parent firm) to recognize the cost of the physical good and each service separately that it provides to its affiliates.
• B)in addition to charging for the cost of the physical good, for the parent firm to charge for technical training of the affiliates' staff, cost of worldwide advertising, royalty, licensing fee, and technology, whenever applicable, to facilitate for the MNC to present and support to the taxing authority of a host country that each charge is legitimate and can be well substantiated.
• C)used for removing blocked funds from a host country that is enforcing foreign exchange restrictions.
• D)all of the above

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Definitions:

Numerically Measurable

Characteristics or quantities that can be quantified or expressed using numbers.

Budget Line

A graphical representation of all possible combinations of two goods or services that a consumer can afford given their income and the prices of the goods, reflecting budgetary constraints.

Price

The amount of money required to purchase a good or service, determined by factors such as supply, demand, and production costs.

Trade

The exchange of goods and services between individuals or entities, either within the same country or internationally.