What is the net tax effect for the company

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Question - Svetlana Corporation operates in countries A and B. Country A has a 30% income tax rate. Country B has a 45% income tax rate. Irina Corp produces 500,000 units of part X in country A and transfers the entire lot to its plant in country B. Part X can be transferred at a price of $100 or $80 per unit. Assume that the company chooses the higher transfer price. What is the net tax effect for the company from this choice when compared to choosing the lower transfer price?

Reference no: EM132975472

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