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jarptica [38.1K]
3 years ago
10

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per un

it. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).
Dairy Division Income Division B Income Transfer Price
A High Low Low
B Low High Low
C. Low High High
D. High Low High
E. Low High Low

Which letter A, B, C, D, or E is the correct answer?
Business
1 answer:
lubasha [3.4K]3 years ago
3 0

Answer:

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per unit. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).  

Dairy Division Income Division B Income Transfer Price .

Option  "D"  is the correct answer -  High Low High.

Explanation:

Since in Division B, the tax rate is higher than the tax rate in US-based dairy division. Therefore to minimize the impact of the overall tax, transfer price from dairy division should be high to Division B so that the dairy division income would be higher. and the income of Division B would be lower.

Hence option  "D" is the correct answer.

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sertanlavr [38]

Explanation:

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Considering the given information, the below questions are answered

What do you think that means about the amount of businesses that are reaching out to you?

It will surely be high, because communication can bring business.

Do you think you're more liking to buy things? Reason:

Yes for sure. Advertisement a vital communication tool attracts customer towards buying products, they are the most powerful tool. People start liking the products by seeing its names again and again through any mode of communication about the product.

3 0
3 years ago
Project Droid has a net present value of $45,000 and has an initial investment of $180,000. Project Clone has a net present valu
Allushta [10]

Answer:

Neither Project should be accepted

Explanation:

Given that

The net present value and the initial investment of the project droid is $45,000 and $180,000 respectively

And, the net present value and the initial investment of the project clone is $8,000 and $30,000 respectively

Since the net present value of both the projects are less than their initial investment so both the projects should not be accepted as the net present value is in negative

8 0
3 years ago
Ehere is miley fans here i csnt see​
statuscvo [17]

Answer:

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8 0
3 years ago
Over the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the Un
Lady_Fox [76]

Answer:

No, the U.S. is not regressing

No, it will not take over the U.S.

Explanation:

No, the United States is not regressing because the poor country can boost their growth rate by taking the advanced technology from the developed countries like the United States. So it is easy to poor countries to increase their growth rate but for the developed nations who already using the advance technology is difficult to increase growth rate.

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3 0
3 years ago
MV Corporation has debt with market value of $ 95 ​million, common equity with a book value of $ 102 ​million, and preferred sto
irakobra [83]

Answer:

Total market value $383.8 million

Debt is 24.75%

Preferred stock is 5.21%

Common equity is 70.03%

Explanation:

Calculation of the weights that MV Corporation should use in its WACC

Debt value : $95 million

Preferred stock value : $20 million

Market value of common equity:

$48 per share×5.6million shares= $268.8 million

Total market value of firm: $95 +20 +268.8 =$383.8 million

Weights for WACC calculation:

Debt =95/383.8

=24.75%

Preferred Stock =20/383.8

=5.21%

Common Equity =268.8/383.8

=70.03%

Therefore the total market value of the firm will be $383.8 million Debt is 24.85% of the total value, preferred stock is 5.21%, and common equity is 70.03%

4 0
4 years ago
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