For a Parent That Sells Goods to a Subsidiary, Transfer

question 58

Multiple Choice

For a parent that sells goods to a subsidiary, transfer pricing can have an effect on international capital expenditure analysis. A very low markup policy makes the APV of a subsidiary's capital expenditure appear

• A)more attractive.
• B)less attractive.
• C)no impact.

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Definitions:

Currency Ownership

Refers to holding or possessing currency, both physical and digital, by individuals, businesses, or governments.

Fiat Currencies

Money that a government has declared to be legal tender, though it is not backed by a physical commodity.

Digital Currencies

Electronic money that exists in a digital form, enabling instant transactions and borderless transfer-of-ownership.

Valueless

Lacking in value, importance, or utility; having no worth or significance.