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Why Does the Opportunity Cost Guideline Measure the Minimum Transfer

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Why does the opportunity cost guideline measure the minimum transfer price?


Definitions:

Before-tax Yield

The earnings or return on an investment before the deduction of any taxes.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, expressed as a ratio or percentage of the investment’s gain relative to its cost.

Salary Contribution

The portion of an individual's salary that is allocated to various types of benefits or investment plans, such as a retirement fund.

403b Plan

A tax-advantaged retirement savings plan available for public education organizations, some non-profit employers, and self-employed ministers in the United States.

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