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TRANSFER PRICING



            Goals Of A Transfer Pricing System


            • To motivate the divisional managers to make


                decisions to the advantage of the company or group


                as a whole (goal congruence).



            • To ensure that each division’s performance is fairly


                evaluated.



            • The system should be simple to operate and


                administer.



            • The divisional managers should still have the ability to

                make autonomous decisions.



            • If possible, healthy competition between divisions


                should be encouraged by the transfer pricing system.



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