Part of the Benefit That a Parent Company Receives by Receiving

question 71

Multiple Choice

Part of the benefit that a parent company receives by receiving payment through royalties can be lost if the subsidiary's:

• A) combined tax rate is higher than the parent's.
• B) local government views royalties as an expense.
• C) local tax rates on profits are extremely high.
• D) managers are controlled directly by the parent.

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Definitions:

Line

A line is a one-dimensional shape that extends without end in both directions and lacks any thickness.

Points

Specific locations in space or positions on a graph, defined by their coordinates.

Perpendicular

At an angle of 90 degrees to a given line, plane, or surface or to the ground.

Line

A straight one-dimensional figure having no thickness and extending infinitely in both directions, defined by two points in Euclidean geometry.