The Lower the Transfer Price

question 4

Multiple Choice

The lower the transfer price,

• A)the higher the net profit reported by the MNC.
• B)the lower the gross profit of the transferring division relative to the receiving division.
• C)the higher the gross profit of the receiving division relative to the transferring division.
• D)none of the options

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Definitions:

Save

To allocate income or resources for future use instead of immediate consumption, often by placing it in some form of a bank account or investment.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources, generally classified as residential, commercial, or industrial properties.

Desirable Neighborhoods

Areas that are highly sought after by homebuyers and renters due to factors like safety, amenities, good schools, and proximity to employment opportunities.

Conspicuous Consumption

The purchase and use of goods and services to publicly display wealth rather than to meet basic needs.