If the parent's government imposes a tax rate on funds remitted from a foreign subsidiary, a project is less likely to be feasible from the point of view.

If the parent's government imposes a __ tax rate on funds remitted from a foreign subsidiary, a project is less likely to be feasible from the __ point of view.

high; subsidiary's

high; parent's

low; parent's

high; subsidiary's AND low; parent's

None of these are correct.

Solutions

Expert Solution

The correct answer is High, Parents

When the tax rate is High then it will reduce the lucrativeness of the project because the firm cost of capital will increase if they borrow money from the foreign subsidiary.This will reduce the feasibility of the project from the parent point of view.

jeff jeffy answered 2 years ago

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