Which of the following statements best describes the problem with intercompany transfer pricing?

Multiple Choice

a.)The management of a company in a high-tax-rate jurisdiction structures each company's transfer price to that the profit is earned in a low-tax-rate jurisdiction.

b) The management of the parent company structures each company's transfer price so that eliminations of the intercompany profits are not required when preparing consolidated financial statements.

c.) Companies that are in the same taxation jurisdiction benefit from the transfer price being structured in such a way for the poor performing company to report the higher net income.

d) Intercompany transfer pricing is a mechanism used by management to maximize bonus payments.