Which of the Following Statements Is/are True

question 16

Multiple Choice

Which of the following statements is/are true?
When a multinational company transfers goods or services between business units located in different countries:
i. the tax rates of the different countries will have no effect on overall company profits.
ii. the result is a moving of profits from one country to another.
iii. the company will consider the tax rates of the different countries when determining the transfer price.

• A) i
• B) ii
• C) i and ii
• D) ii and iii

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Definitions:

Annual Fixed Cost

Regular expenses incurred by a business or individual that do not vary with production level or output within a year.

Marginal Cost Curve

A graphical representation showing the change in total cost that comes with producing one more unit of an item.

Marginal Revenue Curve

A graph showing how marginal revenue varies as output quantity changes, important for understanding profit maximization.

Collude

When companies or organizations conspire or work together, often in secret, to control a market or manipulate prices at the expense of fair competition.