Most countries specify that transfer prices be set at ______.
A) an arm's length or market price
B) cost
C) cost plus a profit margin
D) the maximum price that the market will bear
E) None of the above

Question

Quizplus · Accepted Answer

Most countries require that transfer prices be set at an arm's length or market price, which is the price that would be charged by unrelated parties in a similar transaction. This ensures that the transfer price reflects the true value of the goods or services being transferred and prevents companies from artificially manipulating profits by setting transfer prices higher or lower than market value.

Most Countries Specify That Transfer Prices Be Set at ______