Multiple choice questions
1- Which of the following objectives is not achieved through the use of lower transfer prices?
a. Improving the competitive position of a foreign operation.
b. Minimizing import duties.
c. Protecting foreign currency cash flows from currency devaluation.
d. Minimizing income taxes when transferring to a lower-tax country.
2. Which of the following methods does U.S. tax law always require to be used in pricing intercompany transfers of tangible property?
a. Comparable uncontrolled price method.
b. Comparable profits method.
c. Cost-plus method.
d. Best method.