A company produces jackets for 20 each in Portugal, which has a corporate tax rate of 21%. It then transfers its products to its Irish subsidiary for resale to the Irish public at a sales price of 30 per jacket. The corporate tax rate in Ireland is 12.5%.

Calculate the total after-tax profit in the two countries if the company uses a transfer price of 23 and it sells 10,000 jackets.

ANSWERS:

84,950

15,050

66,500

8,495

8,750