A Transfer Pricing Policy Based on Market Price

question 31

Multiple Choice

A transfer pricing policy based on market price

• A) Maximises total organisational profit.
• B) Is best because the market price is always objective and easily obtainable.
• C) May result in suboptimal decision making for the company as a whole.
• D) Is the only alternative accepted by the Australian Taxation Office.

---

Definitions:

Avocations

Activities or hobbies pursued outside one's main occupation, often for enjoyment or fulfillment.

Hobbies

Leisure activities pursued for pleasure and relaxation, not as a main occupation.

Corridor Principle

The corridor principle suggests that when entrepreneurs take action and start a journey, they are able to see and access opportunities that were not visible before starting their venture.

Distributive Responsibility

Involves the allocation or sharing of responsibilities, resources, or benefits among various members of a group or society in a fair and equitable manner.