Using Transfer Prices "Creativity" MNCs Can

question 42

Multiple Choice

Using transfer prices "creativity" MNCs can

• A)try to move blocked funds (but the host country might be watching).
• B)evade tax liabilities (but the host country might be watching).
• C)both a and b
• D)both a and b and there's nothing that the host country government can do about it.

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Definitions:

Capital Intensity Ratio

A metric that measures the amount of assets needed by a company to generate one dollar of revenue.

Operating Capacity

The maximum amount of work or output a company can produce in a set period under normal working conditions.

Full Capacity Sales

The maximum sales level that a company can achieve with its current resources and capabilities without incurring additional costs.

Operating Capacity

The maximum output that a company can produce and sell with its existing equipment and resources, without incurring unsustainable costs.