Parent and Minor Form a Non-Unitary Group of Corporations

question 64

Multiple Choice

Parent and Minor form a non-unitary group of corporations. Parent is located in a state with an effective tax rate of 3% and Minor's effective tax rate is 9%. Acting in concert to reduce overall tax liabilities, the group should:

• A) Have Parent charge Minor an annual management fee.
• B) Shift Parent's high-cost assembly and distribution operations to Minor.
• C) Execute an intercompany loan such that Minor pays deductible interest to Parent.
• D) Do all of these.
• E) Do none of these.

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Definitions:

System.exit(0)

A method in Java that terminates the currently running Java virtual machine by initiating its shutdown sequence.

Garbage Collector

A component of the runtime environment responsible for automatically freeing memory by collecting and disposing objects that are no longer in use.

Sentence.length()

A method typically used in programming to find the length of a string or sentence.

Sentence.substring()

A method in Java that extracts and returns a new string that is a part of the original string, starting from a specified index to the end or between specified indices.