Multiple Choice
You can manufacture a product in the US and transfer it to Europe.If the marginal cost (MC) is $3 per unit,and the market price in Europe is $5 per unit,should the product be manufactured?
A) No,because the net receipt of $5 is larger than the MC in the US.
B) Yes,because the gross receipt of $3 is larger than the MC in the US.
C) No,because the net receipt of $3 is the same as the MC in the US.
D) Yes,because the net receipts in Europe will exceed the MC in the US.
Correct Answer:
Verified
Correct Answer:
Verified
Q10: If a company adds up all the
Q11: Marginal-cost transfer-pricing creates incentives for manufacturing to
Q12: Clearly,an economist would like to see a
Q13: Holmstrom and Tirole note "The economist's first
Q14: Profit center managers are allocated decision rights
Q16: In the Celtex case study,Leo Garcia,President of
Q17: If there exists an external market for
Q18: In general,the use of accounting-based performance analysis
Q19: What are the measures of performance for
Q20: The basic incentive problem associated with internal