When a Transfer Price Is Set by the Management of a Parent

question 52

Multiple Choice

When a transfer price is set by the management of a parent company rather than by the subsidiary managers, what kind of transfer price is being used?

• A) Market-based transfer price
• B) Negotiated transfer price
• C) Discretionary transfer price
• D) Cost-based transfer price

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Definitions:

Cortisol

A steroid hormone produced by the adrenal glands, often released in response to stress and low blood-glucose concentration.

Neuronal Damage

Harm or injury to neurons, the basic working units of the brain and nervous system, leading to various neurological conditions.

Dementia

An umbrella term for various neurological conditions characterized by a progressive decline in cognitive function, affecting memory, thinking, orientation, comprehension, calculation, learning capacity, language, and judgement.