A U.S.-based multinational has two subsidiaries, one in Lithuania where the tax rate is 15%, and one in Ireland where the tax rate is 2%. The tax rate in the U.S. is 35%
If the Lithuanian-based subsidiary is transferring a good to the Irish subsidiary and the goal is to avoid taxes, it will A) sell it to the U.S. parent at a transfer price equal to marginal cost, which will then sell it to the Irish subsidiary at monopoly level pricing.
B) set the transfer price to the Irish subsidiary at the monopoly level.
C) set the transfer price to the Irish subsidiary at marginal cost.
D) Unable to determine with the information given.
C
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An investment of $10,000 promises a payment of $13,000 after six years. If the annual rate of interest is $8%, what is the net present value of the investment?
What will be an ideal response?
Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, a decrease in the excess reserve ratio to 0% causes the M1 money multiplier to ________, everything else held constant
A) increase from 2.33 to 2.55 B) decrease from 2.55 to 2.33 C) increase from 1.67 to 1.82 D) decrease from 1.82 to 1.67