"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:

Cremaster Muscle

A muscle that covers the testis and spermatic cord, involved in the reflex action of moving the testis closer to the body in response to cold or fear.

Vas Deferens

The duct that conveys sperm from the testicle to the urethra.

Spermatic Cord

A bundle of fibers and tissues in males that includes the vas deferens, blood vessels, nerves, and the cremaster muscle, responsible for supporting the testes.

Inguinal Canal

A passage in the lower anterior abdominal wall which in men, contains the spermatic cord and in women, the round ligament of uterus.