Which of the Following Statements Is FALSE

question 27

Multiple Choice

Which of the following statements is FALSE?

• A)If the U.S.tax rate exceeds the combined tax rate on all foreign income,it is valid to assume that the firm pays the same tax rate on all income no matter where it is earned.
• B)Firms can lower their taxes by pooling multiple foreign projects and accelerating the repatriation of earnings.
• C)Under U.S.tax law,multinational corporations may use any excess tax credits generated in high-tax foreign countries to offset their net U.S.tax liabilities on earnings in low-tax foreign countries.
• D)If the foreign tax rate exceeds the U.S.tax rate,because the U.S.tax credit exceeds the amount of U.S.taxes owed,no tax is owed in the United States.

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Definitions:

Demand Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating its sensitivity to price changes.

Planning Horizon

The time period over which a plan, projection, or decision is expected to unfold or have an impact.

Natural Gas

A fossil fuel composed mainly of methane, used as an energy source for heating, cooking, and electricity generation.

Wage Rate

The wage rate is the standardized amount of money paid for a specific unit of time worked, such as hourly or weekly rates, often determined by market forces or agreements.