What Is the "Floor" in Transfer Pricing

question 40

Multiple Choice

What is the "floor" in transfer pricing?

• A)the transfer price that would leave the buying division no worse off if an input is purchased from an internal division
• B)the transfer price that would leave the selling division no worse off if a good is sold to an internal division
• C)the transfer price that would leave the buying division worse off if an input is purchased from an internal division
• D)the transfer price that would leave the selling division worse off if a good is purchased from an outside supplier

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