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Charging strategies with subsidiaries depending

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Creative accounting

MNE's frequently change their charging strategies with their subsidiaries depending on the strength of the dollar, local versus home taxes, need to bolster portfolios or any other reason. A foreign subsidiary might be asked to under price their raw materials selling to a manufacturing plant in the US. This helps the home plant be competitive and look good, but the subsidiary looks bad on the books. Discuss the pros and cons of this practice.

Reference no: EM132256485

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