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Which of the following statements about market-based transfer prices are correct?
(i) A profit centre buying the item is likely to be indifferent between buying externally and buying the item from within the business.
(ii) A transfer price at market value might not encourage profit centres buying the item to utilise spare capacity.A (i) only B (ii) only C Both (i) and (ii) D Neither (i) nor (ii)
Can you explain me if point number 2 is wrong or right?
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