Multinational Enterprise Practices Questions
Description
-3rd assignment
- Explain and discuss in detail the term Transfer Pricing. Your discussion, in addition to defining
transfer pricing should include: (50 points)
a.Why is transfer pricing used?
b.How is transfer pricing used?
c.What is the relationship of transfer pricing to revenue, net profit, and costs /expense?
d.How would a MNE use transfer pricing for services?
e.What issues could arise when using transfer pricing?
Hint: Use diagrams and another illustration to help explain the questions above and use the language of international business as your instructor would
- What are the two ways that MNEs capitalize their subsidiaries? Give an example of each. (40 points)
- What is a transfer pricing contract? (10 points)