The Use of an Optimal Transfer Price Eliminates Potential Conflicts

question 138

True/False

The use of an optimal transfer price eliminates potential conflicts between an organization's interests and the divisional manager's interest.

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Definitions:

Common Shares Outstanding

The total number of shares of a corporation's stock that are currently owned by investors, including those held by institutional investors and company officers.

Net Income

The total earnings of a company after deducting all expenses, including taxes and operating costs, from its total revenue.

Weighted-Average

A calculation that takes into consideration the varying degrees of importance of the numbers in a data set.

Cash Dividends

Cash Dividends are payments made by a corporation to its shareholder members. It is a share of profits and retained earnings that the company pays out to its shareholders.