The Resale Price Method of Transfer Pricing Requires a Company

question 15

Multiple Choice

The resale price method of transfer pricing requires a company to

• A)understand the value added functions of each related party.
• B)transfer at the full cost of the product plus a markup.
• C)determine the market-based price.
• D)calculate the arm's-length resale price.
• E)calculate the return on assets.

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Definitions:

Cash

Liquid assets held by an entity that can be immediately used for transactions.

Ex-dividend Date

The specific date on which shares of a company stop coming with the right to receive the most recently declared dividend, usually set two trading days before the record date.

Record Date

The specified date on which a company determines its shareholders' eligibility to receive dividends or the right to participate in corporate actions.

First-quarter Dividend

This is a dividend payment made by a corporation to its shareholders, typically after the first quarter's earnings are calculated.