The time and effort spent negotiating a transfer price between a company's divisions adds nothing directly to the profits of a company.

Question

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Negotiating a transfer price between a company's divisions is an internal transaction and does not directly generate any revenue or profits for the company. However, it is important to establish a fair transfer price to ensure that each division is being properly compensated and that resources are being allocated efficiently. Ultimately, an effective transfer pricing system can help a company maximize its overall profitability.

The Time and Effort Spent Negotiating a Transfer Price Between