Falcon Networks
Falcon Networks Is a Leading Semiconductor Company with Operations

question 69

Multiple Choice

Falcon Networks
Falcon Networks is a leading semiconductor company with operations in 17 different countries.Information about the company's taxes appears below:
$\begin{array}{l}\begin{array}{lll} \text { Falcon Networks}\\ \text { Components of Income Tax Expense}\\ \text { (in millions) }\\\\ \text { Current - Federal}\\ \text { - Foreign}\\ \text { - State and Local}\\ \text { Total Current}\\ \text { Deferred - Federal}\\ \text { - Foreign}\\ \text { Total Deferred}\\ \text { Total Income Tax Expense}\\ \text { Note: Falcon Networks has no current liability at year-end with }\\ \text { respect to total current taxes.}\\ \text { Components of Income before Taxes}\\ \text { United States}\\ \text { Foreign}\\ \text { Total}\\\end{array}\begin{array}{lll}\\\\\\\mathbf{2 0 1 2} & \mathbf{2 0 11} \\\$ 55.65 & \$ 47.52 \\83.85 & 78.95 \\\underline{14.69} & \underline{12.5} \\\$ 154.19 & \$ 138.97 \\\$ 30.28 & \$ 42.90 \\\underline{23.89} &\underline{14.58}\\\$ 54.17& \$ 57.48 \\\underline{\$ 208.36}& \underline{\$ 196.45} \\\\\\\mathbf{2 0 1 2} & \mathbf{2 0 1 1} \\\$ 256.35 & \$ 253.68 \\\underline{236.85} & \underline{198.85}\\\underline{\$ 493.20}&\underline{\$ 452.53}\end{array}\end{array}$
-Using the information provided by Falcon Networks,determine the federal effective tax rate for 2012.

• A) 33.52%
• B) 35.00%
• C) 42.25%
• D) 45.49%

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Definitions:

Issue Development

The process by which concerns or problems are identified, defined, and evolved for discussion or resolution.

Double-Edged Effect

A situation or strategy that has both positive and negative outcomes or implications.

Overconfidence

A cognitive bias where a person's subjective confidence in their judgments is greater than the objective accuracy of those judgments.

Fundamental Attribution Error

The fundamental attribution error is the tendency to overemphasize personal characteristics and underestimate situational influences when explaining someone else's behavior.