An Advantage of a Negotiated Transfer Price Is the ________

question 77

Multiple Choice

An advantage of a negotiated transfer price is the ________.

• A) close relationship between the negotiated price and the market price
• B) negotiated transfer price preserves divisional autonomy
• C) negotiations usually do not require much time and energy
• D) simplicity of its computations and close approximation to market price

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Definitions:

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

Limited Liability

A corporate structure where an individual's financial risk in the business is restricted to their investment in the company.

Corporation

A legal entity, created by the state, whose assets and liabilities are separate from its owners.