A Transfer-Pricing Method Leads to Goal Congruence When Managers

question 84

Multiple Choice

A transfer-pricing method leads to goal congruence when managers:

• A)always act in their own best interest
• B)act in their own best interest and the decision is in the long-term best interest of the manager's subunit
• C)act in their own best interest and the decision is in the long-term best interest of the company
• D)act in their own best interest and the decision is in the short-term best interest of the company

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Definitions:

Vertical Axis

The “up-down” or “north-south” measurement line on a graph or grid.

After-Tax Income

The amount of income left to an individual or business after all federal, state, and local taxes have been applied.

Consumption

The process by which goods and services are used up or utilized by individuals or entities.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.