Jensen Optimetrics Inc

question 9

Multiple Choice

Jensen Optimetrics Inc. is based in a country with a territorial approach to taxation but generates 100% of its income in a country with a worldwide approach to taxation. The tax rate in the country of incorporation is 25%, and the tax rate in the country where they earn their income is 50%. In theory, and barring any special provisions in the tax codes of either country, Jensen should pay taxes at a rate of ________.

• A)75%
• B)62.5%
• C)0%
• D)50%

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Definitions:

United States

A country located in North America, consisting of 50 states and a federal district, known for its significant influence on world economy and culture.

Sugar Prices

The cost per unit of sugar, which can fluctuate based on supply, demand, and other market conditions.

Regressive Income Tax

A taxation method where the tax rate falls as the amount being taxed grows.

Opportunity Cost

The cost of foregone alternatives, representing the benefits one could have received by taking a different decision.