💡 When a company sells products to a foreign subsidiary, it must determine the transfer price, which can impact import tariffs, taxes, and overall profitability. The best approach should ensure compliance with regulations while minimizing costs. C. Charge at the arm's length price. – ࿨ ࿩ ࿪ Correct Arm’s length price refers to a fair market price that unrelated parties would charge in an open market. This ensures compliance with international tax laws (e.g., OECD transfer pricing guidelines) and minimizes the risk of legal or tax disputes. While it may not always minimize import tariffs, it prevents regulatory issues and ensures transparent and fair pricing.