What properties should transfer-pricing systems have?

Q: Vertical Analysis

A: Trend analysis is an analysis done by the companies to understand their current performance with…

Q: What is operating leverage, and for what is it used?

A: Operating Leverage is a cost-accounting formula used to measure the growth of its operating income.…

Q: Why is partitioning an internal rate of return important?

A: Introduction: There are two cash flow components which can form the portioning of internal rate of…

Q: How are the network and hierarchical models different?

A: Database Management:   Database management refers to management of databases held within an…

Q: Define trade-off theory

A: Answer: The trade-off theory suggests a leveraged company’s valuation is equal to the value of an…

Q: Why is it important to distinguish flexible and committed resources?

A: The economic elements that allow one to perform activities are referred to as the resources.…

Q: Define pricing decisions.

A: Selling Price:   It refers to the price at which the product or service will be sold in the market…

Q: Explain Concept Syndications?

A: Syndication is a process by which small lenders come together and they lend the money to a big…

Q: Describe Trade-Off theory.

A: Trade-Off theory suggests that there is an optimal capital structure that maximizes the value of the…

Q: What does horizontal analysis try to reveal ?

A: Horizontal analysis of financial statements involves comparison of a financial ratio, a benchmark,…

Q: What are the different liquidity tools?

A: Liquid assets are those assets which are either in cash form or can be converted into cash into…

Q: IS a outsource?

A: Outsourcing is the process of hiring a third party to perform the company's services that are…

Q: Understand important international issues that arise in transfer pricing.

A: Transfer pricing:   Transfer pricing refers to the setting of prices for goods and services that are…

Q: List the advantages of decentralization.

A: Decentralization refers to the organizational structure under which the top management delegates…

Q: Define crossover rate

A: Crossover over rate helps the company to determine which investment proposal will be beneficial in…

Q: Define the term Fair Value Hierarchy.

A: Fair value: A value which is determined based on the market situation, business demand, and the…

Q: What are input flexibility options and output flexibility options?

A: The question is based on the concept of production process. The managers can use variation in Input…

Q: What stages are involved in planning complex supply negotiations?

A: Negotiation:   It is a trade process that covers the period e=when the first communication is made…

Q: What is offer price?

A: Bid price is the maximum price which the buyer is willing to pay to purchase. In other words, it…

Q: What is a transaction price?

A: Transaction price: It is the price of a service or a good which is expressed relative to the similar…

Q: What is flexibility option?

A: A financial instrument that provides the opportunity to the buyer and seller to purchase and sell…

Q: What is alpha transfer?

A: The term ‘Alpha’ refers to the active return on investment. In other words, the excess return from…

Q: What is an Acquisition costs?

A:

Q: What is target pricing? Who uses it?

A: Target pricing: A pricing method which is used to identify the price at which the product will be…

Q: What is the meaning of operating leverage?

A: Leverage ratio: It overlooks the mixture of debt and equity which is required for analyzing the…

Q: What is operating leverage?

A:

Q: maximization goal?

A: According to standard theory of the firm, profit maximization is taken into account to be the…

Q: Give two definitions for enterprise value?

A: Enterprise Value is the measure of a company’s total value. It consider the entire market value of a…

Q: How do you find full absorption cost

A: Absorption costing refers to the method of managerial accounting in order to capture all the costs…

Q: Define transfer price

A:

Q: Define opportunity cost

A: Opportunity costs represent the benefits an individual, investor or business misses out onwhen…

Q: What is frequency regarding the make or buy decision?

A: Make or Buy: Make or Buy decision are normal condition arises in front of management due to…

Q: Outline the rules for identifying the optimal transfer price.

A: Transfer pricing:- Transfer pricing is considered as the value that is attached to those goods and…

Q: Explain The Auction Process?

A: An auction is the place or thing where potential buyers and seller gather to publicly bid for the…

Q: What is an allocation base? Give some examples.

A: When we discuss allocation base, it explains about the basis on which the overhead costs are…

Q: What is notional value?

A: Notional value is used to value the underlying asset. In simple words it tells how much of value a…

Q: Explain the term supply chain.

A: The goods and services available with the suppliers at a given point of time which the suppliers are…

Q: Define separable cost.

A:

Q: What should the transfer price be and why?

A: Given that: Transfer price as proposed by Top Division = $256 Price that is charge to outside…