In multinational settings,top management must choose transfer prices carefully to ________ tax minimization considerations,currency repatriation issues,and the evaluation of divisional managerial performance.
A)lower
B)balance
C)increase
D)decrease
E)overdraw

Question

Quizplus · Accepted Answer

Transfer prices are the prices charged for goods and services exchanged between different divisions or subsidiaries of a multinational company. Top management must balance tax minimization considerations, currency repatriation issues, and the evaluation of divisional managerial performance while setting transfer prices. Lowering transfer prices can negatively affect tax minimization and currency repatriation, while increasing transfer prices can negatively affect managerial performance evaluation. Therefore, the best choice is to balance these factors while setting transfer prices.

In Multinational Settings,top Management Must Choose Transfer Prices Carefully to ________