Explain the objectives of transfer pricing and describe the advantages and disadvantages of various transfer pricing alternatives.
Strategic performance measurement: Investment centers and transfer pricing
After studying this chapter, you should be able to
Explain the use and limitations of return an investment for evaluating the short-term financial performance of investment centers.
Explain the use and limitations of residual income for evaluating the short-term financial performance of investment centers.
Explain the use and limitations of economic value added for evaluating the short-terrn finandai performance of investment centers.
Explain the objectives of transfer pricing and describe the advantages and disadvantages of various transfer pricing alternatives.
Understand important internationa/ issues that arise in transfer pricing.