Transfer Pricing Can Affect the Level of After-Tax Profits Earned

question 98

True/False

Transfer pricing can affect the level of after-tax profits earned by a multinational company.

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Definitions:

Opportunities Forgone

The benefits, profit, or value of something that must be given up to acquire or achieve something else.

Opportunity Cost

The outcome of forgoing possible advantages from other alternatives by choosing one option.

Natural Resources

Resources present in nature, like minerals, forests, water, and fertile lands, that can be tapped for making money.

Absolute Advantage

The ability of a country or individual to produce a good or service more efficiently than other countries or individuals, using fewer resources.