Assume that a multinational company produces components in country A a

Assume that a multinational company produces components in country A and ships them to a subsidiary in country B. In order to increase its profits

A) the company should charge a high transfer price for the components if income taxes in country B are higher than in country A.
B) the company should charge a low transfer price for the components if income taxes in country B are higher than in country A.
C) the company should charge a high transfer price for the components if income taxes in country A are higher than in country B.
D) None of the above

ANSWER

A