Question: A U.S.-based MNC has a foreign subsidiary that earns $241,000 before local taxes, with all the after-tax funds to be available to the parent in

 A U.S.-based MNC has a foreign subsidiary that earns $241,000 before

A U.S.-based MNC has a foreign subsidiary that earns $241,000 before local taxes, with all the after-tax funds to be available to the parent in the form of dividends. The applicable taxes consist of a 33% foreign income tax rate, a foreign dividend withholding tax rate of 9.7%, and a U.S. tax rate of 30%. Calculate the net funds available to the parent MNC if: Foreign taxes can be applied as a credit against the MNC's U.S. tax liability. No tax credits are allowed. If foreign taxes can be applied as a credit against the MNC's U.S. tax liability, the net funds available to the U.S. company is $ (Round to the nearest dollar.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!