Faber Corporation is a young start-up technology company with steadily increasing sales in its first six months

Question:

Faber is a young start-up technology company with steadily increasing sales in its first six months of operations. Faber's head office is located in a country in Eastern Europe, where the company would be subject to a corporate income tax rate of 28%. Next year, Faber plans to launch international sales of its products in a country in Asia (where the corporate income tax rate is 35%) and one in South America (where the corporate income tax rate is 38%).
(a) What is the effect of income taxes on a company's profits?
(b) What is the effect of income taxes on a company's cash flows?
(c) Considering only the effect of income taxes, in which country should Faber register its company?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...