If the French Subsidiary of a U

question 20

Multiple Choice

If the French subsidiary of a U.S. company ships components to its U.S. parent at an arbitrarily low transfer price,

• A) the French subsidiary will show relatively high profits.
• B) the French government will collect relatively low corporate income tax.
• C) U.S. Customs will collect relatively high tariffs.
• D) the U.S. parent will show lower pre-tax profits.

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