The Level of the Transfer Price Can Affect the Overall

question 7

Multiple Choice

The level of the transfer price can affect the overall company because

• A) the higher the transfer price, the higher the operating income.
• B) it may impact on the taxes paid by the multinational company.
• C) the lower the transfer price, the lower the total costs.
• D) internal transfers are always costly to the firm.
• E) the transfer price may be higher than the cost-based price.

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Restatement of Contracts

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