Should garcia locate its european operation

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Reference no: EM133633811

Question: Garcia Company is in the process of deciding where to establish a European manufacturing operation: Germany. Italy. or Spain. Garcia's home country does not have a tax treaty with any of these countries. Regardless of location. the operation is expected to generate ore-tax income of 1 million euros mutually. The operation will distribute 100 percent of its after-tax income to Garcia Company as a dividend each year. Required: :1. Using the information on e?'ective income tax rates and withholding tax rates provided in Exhibits 3.1 and I? 3-3. determine the net amount of dividend that Garcia would receive annually from an investment in each of these three countries. 13. if maximizing after-tax dividends is the sole criterion. in which of the three countries should Garcia locate its European operation?

Reference no: EM133633811

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