If the Portions of the Firm's Foreign Operations in Higher-Tax-Rate

question 52

Multiple Choice

If the portions of the firm's foreign operations in higher-tax-rate countries grew more rapidly than foreign operations in lower-tax-rate countries,the company may seek out more tax effective ways of operating abroad through all of the following means except:

• A) Assess whether transfer prices or cost allocations can be adjusted to shift income
• From high-tax-rate to low-tax-rate jurisdictions.
• B) Shift from domestic to foreign borrowing to increase deductions for interest against
• Foreign-source income.
• C) Shift from debt to equity financing of foreign operations to increase interest deductions
• Against foreign-source income.
• D) Shift some operations, like marketing, to the United States where the average tax rate is lower.

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Definitions:

Necessary Reagents

Specific chemicals or substances required to carry out a particular chemical reaction.

Reaction

A process in which chemical substances convert to other substances through the breaking and forming of chemical bonds.

Synthetic Steps

The individual reactions or processes that are performed in sequence to synthesize a desired chemical compound from simpler starting materials.

PCC

Pyridinium chlorochromate, a reagent used in organic chemistry for the oxidation of primary and secondary alcohols to aldehydes and ketones, respectively.