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CIMAPRO19-P02-1 Exam - Topic 8 Question 69 Discussion

Which of the following statements regarding multinational transfer pricing is INCORRECT?
A) Transfer prices affect tax liabilities and royalties because of different laws in countries. and C) Companies have incentives to set transfer price to increase revenues in low-tax countries. and D) Companies have incentives to set transfer price to increase costs in high-tax countries.
B) If transfer prices are inflated, this will increase profits of buying division.

CIMAPRO19-P02-1 Exam - Topic 8 Question 69 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 69
Topic #: 8
[All CIMAPRO19-P02-1 Questions]

Which of the following statements regarding multinational transfer pricing is INCORRECT?

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Suggested Answer: A, C, D

by Solange at Apr 21, 2023, 06:34 PM

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Golda
8 months ago
I thought inflated prices would hurt the buying division, not help it!
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Stephane
9 months ago
D makes sense; companies want to minimize costs in high-tax areas.
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Douglass
9 months ago
Wait, are we sure about option B? Seems off.
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Burma
9 months ago
Totally agree, especially with different laws in play.
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Frank
9 months ago
Transfer prices definitely impact tax liabilities.
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Bernardo
9 months ago
D sounds tricky. I feel like setting transfer prices to increase costs in high-tax countries could be a strategy, but I'm not completely confident.
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Paris
9 months ago
I think C makes sense because companies often want to shift profits to lower-tax jurisdictions.
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Marnie
9 months ago
I'm a bit unsure about B. If transfer prices are inflated, wouldn't that actually decrease profits for the buying division?
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Aracelis
10 months ago
I remember studying that transfer prices can definitely impact tax liabilities, so A seems correct to me.
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Katy
10 months ago
The wording of these options is a bit confusing. I'll need to read them closely to make sure I understand the differences.
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Viola
10 months ago
Okay, let me see. Unsuccessful teams are not provided with incentives, they're not organized, and they don't have enough time. I think option C is the best answer here.
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Florinda
10 months ago
This is a good opportunity to demonstrate my understanding of data privacy regulations. I'll make sure to thoroughly analyze the scenario and the answer choices to identify the one that is not true for Maurya Logistics.
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Galen
1 year ago
Wait, is this a trick question? I feel like they're trying to catch us out with these transfer pricing concepts. Better double-check my answers!
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Markus
1 year ago
C) Companies have incentives to set transfer price to increase revenues in low-tax countries.
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Kanisha
1 year ago
B) If transfer prices are inflated, this will increase profits of buying division.
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Carlton
1 year ago
A) Transfer prices affect tax liabilities and royalties because of different laws in countries.
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Rutha
1 year ago
Option A seems to be the incorrect statement. Transfer prices do affect tax liabilities and royalties due to different laws, so that one is actually correct.
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Elden
1 year ago
Haha, these transfer pricing questions are tricky. Gotta keep an eye out for those sneaky incorrect statements!
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Peter
1 year ago
D) Companies have incentives to set transfer price to increase costs in high-tax countries.
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Santos
1 year ago
C) Companies have incentives to set transfer price to increase revenues in low-tax countries.
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Rosendo
1 year ago
B) If transfer prices are inflated, this will increase profits of buying division.
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Keneth
1 year ago
A) Transfer prices affect tax liabilities and royalties because of different laws in countries.
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Shalon
1 year ago
D) Companies have incentives to set transfer price to increase costs in high-tax countries.
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Tamar
1 year ago
C) Companies have incentives to set transfer price to increase revenues in low-tax countries.
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Adelaide
1 year ago
B) If transfer prices are inflated, this will increase profits of buying division.
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Emeline
1 year ago
A) Transfer prices affect tax liabilities and royalties because of different laws in countries.
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Ellen
1 year ago
I think option D is the right answer here. Companies do have incentives to set transfer prices to increase costs in high-tax countries to minimize their tax liabilities.
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Donette
1 year ago
Option B is incorrect. If transfer prices are inflated, this will actually decrease profits of the buying division, not increase them.
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Dorinda
1 year ago
B) If transfer prices are inflated, this will actually decrease profits of the buying division, not increase them.
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Cristina
1 year ago
A) Transfer prices affect tax liabilities and royalties because of different laws in countries.
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Evangelina
1 year ago
Why do you think that?
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Devorah
1 year ago
I disagree, I believe the answer is C.
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Evangelina
1 year ago
I think the answer is D.
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