Which of the Following Is NOT an Acceptable Allocation Approach

question 113

Multiple Choice

Which of the following is NOT an acceptable allocation approach to transaction pricing?

• A) expected value approach
• B) adjusted market assessment approach
• C) expected cost plus a margin approach
• D) residual approach

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Definitions:

Accounting Rate of Return

A financial ratio that measures the return on investment from assets, indicating the efficiency of generating profits from its resources.

After-Tax Net Income

The amount of income that remains after all applicable taxes have been subtracted from the total revenue.

Initial Investment

The original sum of money used to start a business venture or investment.

Accounting Rate of Return

A financial ratio that measures the expected profitability of an investment, calculated as the average annual profit divided by the initial investment.