Exam 17: Global Pricing

A functional analysis measures the profits of two related companies and compares them with the proportionate contribution of the total income of each corporate group.

Deriving transfer prices from the market is the most marketing-oriented pricing method because it takes local conditions into account.

Manipulating intercorporate prices complicates internal control measures and, without proper documentation, will cause major problems.

Global marketers must set and adjust both their financial and marketing objectives based on the prevailing conditions in their markets.

The amenity accoutrement method is the most applicable approach for transfers of components or unfinished goods to overseas subsidiaries.

What are the two general types of challenges to transfer pricing policies?

Which of the following is a principle basis for transfer pricing favored by governments to stop companies from shifting income to foreign subsidiaries in low- or no-tax jurisdictions?

Costs are frequently used as a basis for price determination largely because they are easily measured and provide a floor under which prices cannot go in the long term.

Which of the following is not one of the influences on transfer pricing decisions?

Transfer pricing is the pricing of objects that are sold on the broad market and are transported via rail, auto, truck or other mechanized system.

The basis for intercompany transfer pricing, which is the price that unrelated parties would have arrived at for the same transaction, is called competitive parity pricing.

Which of the following is not an effect of price controls?

Transactions in which purchases are tied to sales and sales to purchases are called:

Although it is used less often today, this form of countertrade is an arrangement whereby goods are exchanged directly for other goods of approximate equal value.

Barter is the exchange of goods for other goods of equal value.

Which of the following typically accompanies varying inflation rates?

Global marketing objectives, both financial and marketing related, are based on what?

What is a countertrade transaction?

Which of the following is not an emerging philosophy of transfer pricing?

Which of the following matches this definition? "Adjusting prices to current conditions: for example, a status-conscious market that insists on products with established reputations will be inelastic, allowing for more pricing freedom than a price-conscious market."