Understanding of Arms' Length Price (ALP)

When the price determined by the application of Most Appropriate Method is a single price, then what would apply?

• Arthmetic Mean

• Range

• Median

• None of the Above

Which of the following method takes into account the operating expenses incurred and the profit margin earned by an unrelated party in a similar transaction?

• Comparable Uncontrolled Price Method

• Transactional Net Margin Method

• Cost Plus Method

• Resale Price Method

Which of the following is a disadvantage of CUP method?

• It is difficult to apply in practice

• It may not be possible to find comparable transaction

• It is based on profit margin which is unreliable

• None of the above

what is the result of FAR analysis:

• Characterization of entities

• identification of entities

• identification of uncontrolled transaction

• identification of controlled transaction

Range concept is applicable when________ method is used to determine the Arm's length price

• CUP Method

• Transaction Net Margin Method

• Other Method

• A and B

Under Transfer Pricing, Actual transaction price or profit margin would be accepted if it falls in the range of:-

• 35th -65th percentile of the given dataset

• 65th -75th percentile of the given dataset

• 35th -45th percentile of the given dataset

• 15th -35th percentile of the given dataset

The allocation of profit or loss under the profit split method must be made in accordance with one of the following allocation methods:-

• Comparable Profit Split Method

• Uncontrolled profit split method

• Residual Profit Split Method

• Both A and C

Which of the following is a situation where the resale price method is not appropriate?

• When the seller incurs significant marketing expenses related to product or service

• When the product is easily available from supplier 

• When the product is subject to rapid technological changes

• All of the above

Rule 10B(1)(a) applies to which method?

• CPM

• CUP Method

• RPM

• PSM

Which of these is not a method to calculate ALP:

• Margin Price Method (MPM)

• Resale Price Method (RPM)

• Cost Plus Method (CPM)

• Cost Plus Method (CPM)