When Choosing to Establish a Foreign Branch or Subsidiary,a Prime

question 66

Multiple Choice

When choosing to establish a foreign branch or subsidiary,a prime factor in the U.S.company's decision is:

• A) the tax rates applicable to different forms of organizations.
• B) the investment tax credit given by the foreign country.
• C) whether the foreign taxes are creditable taxes for U.S. purposes.
• D) both the tax rates applicable to different forms of organizations and whether the foreign taxes are creditable taxes for U.S. purposes.

---

Definitions:

Operating Activities Section

A part of a company's cash flow statement that shows the cash flow from its core business operations.

Direct Method

A method of computing the net cash provided by operating activities in which the income statement is reconstructed on a cash basis from top to bottom.

Indirect Method

A method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis. It is also known as the reconciliation method.

Inventory

Raw materials, work-in-process, and finished goods that a company holds with the intent to sell or use in production.