Question: Comment on the following statement: Transfer prices do not matter because they don't impact operating income. After all, what is revenue to one division is

Comment on the following statement:

Transfer prices do not matter because they don't impact operating income. After all, what is revenue to one division is an expense to another division.

Assume a multidivisional company is addressing transfer pricing issues. Assume all divisions of the company are within the same taxing authority and pay the same tax rate.

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