All Else Constant, the Multinational Corporation Has a Tax Incentive

question 31

Multiple Choice

All else constant, the multinational corporation has a tax incentive to shift ______ toward low-tax jurisdictions and shift ______ toward high-tax jurisdictions.

• A) expenses; expenses
• B) expenses; revenues
• C) revenues; expenses
• D) revenues; revenues
• E) None of the above

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Definitions:

Current Asset

An asset on a company's balance sheet that is expected to be converted into cash within one year or one business cycle, whichever is longer.

Statement of Cash Flows

A financial report that summarizes the amount of cash and cash equivalents entering and leaving a company.

Operating Activities

Activities directly related to the primary business operations, including revenue generation and expenses directly tied to the core business functions.

Indirect Method

A way of calculating cash flows from operating activities by adjusting net income for changes in non-cash accounts.