Use the Information for the Question(s)below

question 28

Multiple Choice

Use the information for the question(s) below.
KT Enterprises,a U.S.import-export trading company,is considering its international tax situation.KT's U.S.tax rate is 21%.KT has significant operations in both Japan and Ireland.In Japan the current exchange rate is ¥118.4/$ and earnings in Japan are taxed at 41%.In Ireland the current exchange rate is $1.27/€ and earnings in Ireland are taxed at 12.5%.KT's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are shown here (in millions) :
-The amount of the taxes paid in dollars for the Japanese operations is closest to:

• A)$29.5 million.
• B)$5.1 million.
• C)$50.0 million.
• D)$20.5 million.

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Definitions:

Account Earning

The income generated from an investment or the revenue accrued from a bank account over a specific period.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value.

Savings Bond

Government-issued bonds that are designed for individual investors and offer a fixed interest rate over a fixed period of time.

Matures

Refers to the point in time when a financial instrument, like a bond or loan, reaches its due date and the principal amount must be repaid.