Which of the Following Statements Is True Regarding Royalties and Fees

question 45

Multiple Choice

Which of the following statements is true regarding royalties and fees?

• A)Royalties may be levied as fixed charges for the particular services provided.
• B)A fee may be levied as a fixed monetary amount per unit of the product the subsidiary sells or as a percentage of a subsidiary's gross revenues.
• C)Royalties may be differentiated into "management royalties" for general expertise and advice and "technical assistance royalties" for guidance in technical matters.
• D)Royalties and fees are often tax-deductible locally,so arranging for payment in royalties and fees will reduce a foreign subsidiary's tax liability.

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Definitions:

Sex-linked Inheritance

A mode of inheritance that is associated with genes located on the sex chromosomes, often leading to traits or disorders manifesting differently in males and females.

X Chromosome

One of the two sex chromosomes, X and Y, that determine genetic sex. The X chromosome carries a significant number of genes responsible for various bodily functions.

Physical Contact

Interaction involving touch between individuals, which can influence emotional well-being and social bonding.

Autism

A developmental disorder characterized by challenges in social interaction, communication, and by restricted and repetitive behaviors.