12. Transfer pricing Please refer to Table 2 in the datafile. Assume further that EuroTrade Switzerland is the exclusive supplier of EuroTrade Americas. (i.e. the revenue of EuroTrade Switzerland is equal to the cost of goods of EuroTrade Americas) What is the maximum amount by which EuroTrade could increase its consolidated (Americas + Germany) net income through transfer pricing? a) 150,000 b) 480,000 c) consolidated net income cannot be increased through transfer pricing d) 90,000 0 all amounts in USD EuroTrade Americas EuroTrade Switzerland 20% 5% tax rate cost of debt cost of equity debt equity 35% 10% 15% 4 000 000 6 000 000 10% 5 000 000 7 500 000 revenue cost of goods EBIT 8 000 000 7 000 000 1 000 000 7 000 000 5 000 000 2 000 000 interest taxes due net income 12. Transfer pricing Please refer to Table 2 in the datafile. Assume further that EuroTrade Switzerland is the exclusive supplier of EuroTrade Americas. (i.e. the revenue of EuroTrade Switzerland is equal to the cost of goods of EuroTrade Americas) What is the maximum amount by which EuroTrade could increase its consolidated (Americas + Germany) net income through transfer pricing? a) 150,000 b) 480,000 c) consolidated net income cannot be increased through transfer pricing d) 90,000 0 all amounts in USD EuroTrade Americas EuroTrade Switzerland 20% 5% tax rate cost of debt cost of equity debt equity 35% 10% 15% 4 000 000 6 000 000 10% 5 000 000 7 500 000 revenue cost of goods EBIT 8 000 000 7 000 000 1 000 000 7 000 000 5 000 000 2 000 000 interest taxes due net income