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:

Argument Form

The structure or pattern of reasoning used in constructing a logical argument.

Premises

Statements or propositions from which another is inferred or follows as a conclusion.

Syllogism

A deductive argument presented in the form of two supporting premises and a conclusion.

Deductive Argument

A claim that asserts its outcome is an inevitable result of the presented premises.