User Account

All Pages

Calculate the npv of the year zero

Assignment Help Accounting Basics
Reference no: EM132783739

Echo Inc. which has a 21 percent U.S. tax rate, plans to expand Its business Into Country J. It could open a branch office, or it could create a foreign subsidiary In Country J. The branch office would generate $5.000,000 income in year 0. The foreign subsidiary would incur Incremental legal costs and, as a result. would generate only $4,750.000 income in year 0. This Income would be taxed at Country J's 15 percent corporate rate. Any repatriation of the subsidiarys earnings would qualify for the 100 percent dividends-received deduction.

Question 1: Assume none the subsidiary's earnings would be considered GILT! or subpart F Income, calculate the NPV of the Year 0 after-tax foreign source Income from opening a branch office or forming a foreign subsidiary.

Question 2: Should Echo open the branch office or form the subsidiary to maximize year 0 after-tax foreign earnings?

Reference no: EM132783739

Questions Cloud

Calculate the futa tax owed by the employer : Calculate the FUTA tax owed by the employer. An employer in the U.S. Virgin Islands employs two individuals, whose taxable earnings to date
How would you change the process : If worse than budget, are there any consequences? If you were the big boss, how would you change the process?
Which of davies theories seems most applicable : In his chapter "Asking: Questioning Culture and Consumption" from Everyday Culture, David Trend lays out distinctions between high culture and low culture.
Calls tend to follow a poisson distribution : The cost of the clerk is $88 per hour, but because of lost goodwill and sales, Janson's loses about $25 per hour of customer time spent waiting for the clerk to
Calculate the npv of the year zero : GILT! or subpart F Income, calculate the NPV of the Year 0 after-tax foreign source Income from opening a branch office or forming a foreign subsidiary.
List some advantages and disadvantages : Discuss why it is difficult to have large production with greater product variety. List some advantages and disadvantages.
Explain what cpi means and why this method is appropriate : Explain what CPI means and why this method is appropriate for achieving the company business plan. You may need to refer to and use extracts from the continuous
Calculate the statistics in the yellow cells : Calculate the statistics in the yellow cells for the Current Process - determine the standard deviation required to meet their minimum Cpk and with the process
What considerations do you consider to be most important : In 1989, the board of the Cincinnati Museum of Contemporary Art had to decide whether to proceed with the exhibit of Robert Mapplethorpe's career work.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd