Using the Comparable Profits Method of Transfer Pricing, the Transfer

question 51

Multiple Choice

Using the comparable profits method of transfer pricing, the transfer price is determined by:

• A) referring to an objective measure of profitability earned by uncontrolled taxpayers on comparable, uncontrolled sales.
• B) adding a standard profit margin to the operating expenses of the buying division.
• C) dividing a reasonable amount of profit between the selling and buying divisions.
• D) comparing the normal profits of the selling and buying divisions and basing the price on the highest margin.

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Definitions:

Behaviourist Theories

Psychological theories asserting that behavior can be explained in terms of conditioning, without appeal to thoughts or feelings, and that psychological disorders are best treated by altering behavior patterns.

Nativist Theories

Theories that argue for the inherent knowledge or abilities present in the brain at birth.

Language Acquisition

The process by which humans gain the ability to perceive, comprehend, and produce language, typically occurring in childhood through exposure and interaction.

Ape-Language Controversy

Refers to the debate over whether apes can use language in a meaningful and linguistic way or if their "language" use is merely a response to conditioning.