5. Question The firm Examproducer \& Co. produces medication in Brazil ( 26% tax rate) and sells them in Japan ( 32% tax rate). The cost of production for one year are 26 million USD, the revenue net of distribution cost are 99 million USD. Both subsidiaries incur an additional 8 million USD in overhead. Examproducer \& Co. considers two transfer pricing strategies. First, it may use a cost-plus method where it adds 53% to its production cost. Second, it may use a comparable uncontrolled price approach where it knows that the annual production of medication sells at 50 million USD between unrelated entities. Compute the differential in effective tax rates between the two strategies. Tax rate differential =