Question: Question: Implement transfer pricing at IBM for inter-divisional transactions. Determine appropriate transfer prices for software components sold between divisions. Calculate the impact on divisional and

Question: Implement transfer pricing at IBM for inter-divisional transactions.

Determine appropriate transfer prices for software components sold between divisions.

Calculate the impact on divisional and overall company profitability.

Recommend strategies to ensure fair pricing and maintain divisional autonomy.

Components

Selling Division Price ($)

Buying Division Price ($)

Software Component A

$500,000

$600,000

Software Component B

$300,000

$350,000

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