Consider the following statements about transfer pricing: I. Income taxes and import duties are an important consideration when setting a transfer price for companies that pursue international commerce.
II. Transfer prices cannot be used by organizations in the service industry.
III. Transfer prices are totally cost-based in nature, not market-based.
Which of the above statements is (are) true?
A. I only.
B. I and II.
C. II only.
D. II and III.
E. I, II, and III.
Answer: A
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