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Calulating the unit transfer price

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Nintendo Japan sells 7,000 Switch console parts to its Malaysian subsidiary monthly at a transfer price of RM34,000 per unit. Suppose that the transfer price can be set at any level between $31,000 to $39,000. Marginal tax rates on corporate income in Japan and Malaysia are assumed to equal 16% and 12.8%, respectively. To minimize corporate taxes paid by the group, what should be the unit transfer price?

Reference no: EM133004064

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