What is the maximum monthly tax saving

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Suppose Trident's Canadian subsidiary sells 21,000 trucks monthly to its Australian affiliate at a transfer price of $23,000 per unit. The Canadian and Australian marginal tax rates on corporate income are assumed to equal 0.37 and 0.50, respectively. Suppose the transfer price can be set at any level between $22,000 and $30,000. If Trident changes to the optimal transfer price, what is the maximum monthly tax saving?

Reference no: EM132689015

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