In the Ambros Company, Division a Has a Product That

question 58

Multiple Choice

In the Ambros Company, Division A has a product that can be sold either to outside customers or to Division B.Information about these divisions is given below:
- The company uses the opportunity cost approach to transfer pricing.What is the minimum transfer price in Case 1?

• A) $90
• B) $86
• C) $83
• D) $73

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Definitions:

Dividend Policy

The policy a company uses to decide how much it will pay out to shareholders in dividends. It involves whether to distribute profits to shareholders or reinvest them in the business.

Residual Dividend

A policy where dividends are paid to shareholders from the leftover or "residual" profits after all operational and capital expenditures are met.

Reverse Stock Split

A corporate action where a company decreases the number of its existing shares to increase the share price without changing the company’s market capitalization.