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Transfer pricing is a business tool used by many companies. This enables companies to keep profits high, no matter what the economy is doing. The objectives of transfer pricing are, therefore, keeping the profit margin high by over charging or under charging on goods and services. Usually this is done when a company has a brances in multiple companies. For instance, Wal-Mart has merchandise made in China for very low cost, then it is brough to America where it is sold at higher cost. This enables the company to reap large profits.

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