There are a series of key drivers behind transfer pricing decisions of U.S.-based multinationals.The most important of these drivers is thought to be:
A)competition in the foreign country.
B)economic conditions in the foreign country.
C)price controls.
D)exchange controls.
E)market conditions in the foreign country.

Question

Quizplus · Accepted Answer

Market conditions in the foreign country are the most important driver behind transfer pricing decisions of U.S.-based multinationals. This is because the prices charged for goods and services transferred between different parts of a multinational company can have a significant impact on the company's overall profitability. By setting transfer prices that are in line with market conditions, multinational companies can ensure that they are maximizing their profits and minimizing their tax liability.

There Are a Series of Key Drivers Behind Transfer Pricing