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What Are the Problems Related to Market-Based Transfer Prices for External

Question 36

Multiple Choice

What are the problems related to market-based transfer prices for external segment reporting?


A) The segments frequently are interdependent so market prices may not really reflect the same risk in an intercompany sale as they do in third-party sales
B) Frequently market prices are either not readily available or may exist for only some products
C) Both a and b are problems
D) Neither a nor b are problems

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