If a US Parent Is Shipping Inventory to Its Chinese Subsidiary at Subsidiary

question 27

Multiple Choice

If a U.S. parent is shipping inventory to its Chinese subsidiary at an arbitrarily high transfer price,

• A) the U.S. parent will show a lower pre-tax profit.
• B) the Chinese government will collect relatively higher income taxes.
• C) the U.S. government will collect relatively high import tariffs.
• D) the Chinese subsidiary will show relatively lower profits.

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Definitions:

Genus

A term in biology and logic referring to a class of items that share common characteristics, serving as a broader category that includes one or more species.

Sports

Competitive physical activities or games following established rules, often involving teamwork or individual prowess.

Intramural

Activities or competitions occurring within the same institution, especially referring to sports within a single educational establishment.

Genus

A class or group of entities that share common characteristics, often used in classifications and taxonomies.