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When goods are transferred from one division in a company to another division, and there is an intermediate external market for the transferred item in which the goods could be sold, which of the following states the economic transfer pricing rule for what the maximum transfer price should be?
1. The answer is “The lower of the net marginal revenue for the transferring-in division and the external purchase price in the market for the intermediate product.”
2. Could you explain the answer with some simple number?
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