Use the Information to Answer the Following Question(s)

question 1

Multiple Choice

Use the information to answer the following question(s) .
Green Valley Exporters USA has $100,000 of before-tax foreign income. The host country has a corporate income tax rate of 25% and the U.S. has a corporate income tax rate of 35%.
-Refer to Instruction 15.2. If the U.S. has a bilateral trade agreement with the host country that calls for the total tax paid to be equal to the maximum amount that could be paid in the highest taxing country, what is the total amount of income taxes Green Valley Exporters will pay to the host country, and how much will they pay in U.S income taxes on the foreign earned income?

• A) $25,000; $10,000
• B) $25,000; $26,250
• C) $35,000; $0
• D) none of the above

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Definitions:

Nash Equilibrium

A concept in game theory where each player's strategy is optimal given the strategies of all other players, leading to a situation where no participant can benefit by changing strategies while others keep theirs unchanged.

Fund

A sum of money saved or made available for a particular purpose.

Net Incomes

The total earnings or profit of an individual or business after taxes and deductions have been accounted for.

Contributions

The act of giving or donating something, such as time, money, or resources, to a cause or purpose.