1) Which of the following is an unlikely objective of U.S. government policy for the taxation of foreign MNES? A) to raise revenues B) to provide an incentive for U.S. private investment in developing countries C) to improve the U.S. balance of payments D) All of the above are objectives. tax 2) Toyota Motor Company operates in many different countries and pays taxes at many different rates. However, they always pay the same rate as their local competitors. Toyota Motor Company is operating in an environment of policy. A) domestic neutrality B) foreign neutrality C) territorial approach D) none of the above 3) The United States taxes the domestic and remitted foreign earings of U.S. based MNEs no matter where the earnings occurred. This is an example of aan approach to levying taxes. A) worldwide B) territorial C) neutral D) equitable 4) The United States taxes all earnings on U.S. soil by both domestic and foreign firms. This is an example of a approach to levying taxes. A) worldwide B) neutral C) territorial D) none of the above 5) Bacon Signs Inc. is based in a country with a territorial approach to taxation but generates 100% of its income in a country with a worldwide approach to taxation. The tax rate in the country of incorporation is 25%, and the tax rate in the country where they earn their income is 50%. In theory, and barring any special provisions in the tax codes of either country, Bacon should pay taxes at a rate of in the country of incorporation. A) 75% B) 62.5%. C) 0% D) 50% approach. 6) The territorial approach to taxation policy is also termed the A) source B) ethical C) greedy D) location 7) A tax that is effectively a sales tax at each stage of production is defined as a/an tax. A) flat B) equitable C) value-added tax D) none of the above 8) What is the total value of taxes paid in the following example if the value added tax is 10%? A farmer raises wheat that he sells for $1.50 to the grain company. The grain company sells to the processor for $2.00 per bushel. The processor turns the wheat into a breakfast cereal and wholesales it for $3.00 per bushel. The retailer sells the cereal for $4.00 per bushel. A) $0.15 B) $0.20 C) $0.30 D) $0.40 9) Tax-haven subsidiaries are typically established in a country that can meet the following requirements: A) a low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm. B) the facilities to support financial services, for example, good communications, professional qualified office workers, and reputable banking services. C) a stable government that encourages the establishment of foreign-owned financial and service facilities within its borders. D) all of the above