Xerox Corp

question 27

Multiple Choice

Xerox Corp.manufactured parts for copy machines in the U.S.that were shipped to Mexico for assembly.The copiers were designed to be sold to Latin America and did not operate on U.S.electric current.The copiers after assembly were kept in U.S.customs warehouses pending sale to Latin America.These goods were free of import duty by federal law.The city of Houston,Texas,assessed these copiers with a local property tax.Xerox sued to have this tax declared unconstitutional.The court decided:
I.That Xerox must pay all this tax because state/local governments have taxing powers just like the U.S.
II.That Xerox must pay only one-half since state/local governments are one-half partners with the federal government.
III.That this law is preempted by federal law.

• A) I only.
• B) II only.
• C) III only.
• D) Both I and III.

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Definitions:

Coupon Rate

The annual interest rate paid by a bond's issuer to its holders, expressed as a percentage of the bond's face value.

Bond Market

A financial market where participants can issue new debt in the form of bonds or buy and sell debt securities, primarily to and from investors.

Coupon

The yearly rate of interest on a bond, denoted as a percentage of the base value.

Original Maturity

The initial term agreed upon at the issuance of a loan or bond, prior to any refinancing or alteration.