Define transfer pricing

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Reference no: EM132542744

Toyota Motor Corporations is a leading car manufacturer in the world through the sale of its flag ship model the Corolla. The company decided to upgrade this model by changing the platform. As such, Toyota made a vertical acquisition and bought 90% stake in Yamaha, and engine and electronic component company. The company's management saw this as a strategic move to gain ahead of all the other car manufacturers who also depends on Yamaha parts.

Question 1. Define transfer pricing and determine how the objectives could aid in the strategy of Toyota be ahead of the competition.

Question 2. Discuss the benefits of any three method of transfer pricing outline which would be most suitable to aid in Toyota's strategy.

Reference no: EM132542744

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