The most likely result of using a negotiated transfer price is that:

Question

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Using a negotiated transfer price may result in the end decision being influenced by the relative bargaining skills of the managers involved. This means that the transfer price may not necessarily reflect purely economic considerations, and more or fewer units may be transferred than optimal. Additionally, it takes away the buying and selling units' responsibility for determining the transfer price.

The Most Likely Result of Using a Negotiated Transfer Price