Why can the level of the transfer price affect the overall company?
A) It may affect the company's accounts receivable.
B) The lower the transfer price, the lower the total costs.
C) It may affect the taxes paid by the multinational company.
D) The higher the transfer price, the higher the operating income.

Question

Quizplus · Accepted Answer

The level of transfer price can affect the taxes paid by the multinational company as it can influence the reported profits in each country, leading to potential tax savings or higher tax bills. The other options are not necessarily directly impacted by the transfer price.

Why Can the Level of the Transfer Price Affect the Overall