Buy custom Transfer pricing--market-based vs. cost-based
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| Topic: |
Business
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| Number of pages / Number of words: |
10 / 2574 |
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So, the successful adoption of market-based transfer pricing depends on the cooperation of the buying division when the company considers autonomy as one of the key factors for success.
Emmanuel and Mehafdi (1994) argue that transfer pricing is determined by several factors, including strategy with respect to differentiation...
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Companies should choose market-based transfer prices when they choose a low-cost approach to develop a sustainable competitive advantage in the market. This is reasonable, because companies have to focus on reducing costs under a low-cost strategy. However, trying to minimize costs does not make transfer pricing more accurate...
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