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Subsidiary X, located in a country with a 25% corporate income tax rate, and Subsidiary Y, located in a country with a 35% corporate income

Subsidiary X, located in a country with a 25% corporate income tax rate, and Subsidiary Y, located in a country with a 35% corporate income tax rate are part of a decentralized organization. They have been engaged in trade with one another using a negotiated transfer price of $50 per unit for sales by Subsidiary X to Subsidiary Y. Pipko, the parent company of both Subsidiary X and Subsidiary Y recently set a discretionary transfer price of $80 per unit for the transfers between X and Y. What is advantage of this decision? Multiple Choice Net income for the corporation as a whole will increase by $3 per unit. Net income for the corporation as a whole will increase by $30 per unit. Net income for Subsidiary X will increase by $30 per unit Net income for Subsidiary Y will decrease by $30 per unit. +9image text in transcribed

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