Business Performance (000s) Earnings before taxes (EBT) Corporate income tax rate Average exchange rate for the period U.S. Parent (US$) $4,500 35% Brazilian Subsidiary (R$) R$ 6,250 25% R$1.8/$ German Subsidiary () 4,500 40% 0.7018/$ Chinese Subsidiary () 2,500 30% 7.75/$ Americo must pay corporate income tax in each country in which it currently has operations. a. After deducting taxes in each country, what are America's consolidated earnings and consolidated earnings per share in U.S. dollars? All MNEs attempt to minimize their global tax liabilities. Answer the following questions regarding Americo's global tax liabilities: b. What is the total amountin U.S. dollarsthat Americo is paying across its global business in corporate income taxes? c. What is Americo's effective tax rate (total taxes paid as a proportion of pre-tax profit)? d. What would be the impact on Americo's EPS and global effective tax rate if Germany instituted a corporate tax reduction to 28%, and Americo's earnings before tax in Germany rose to 5,000,000? a. After deducting taxes in each country, what are Americo's consolidated earnings and consolidated earnings per share in U.S. dollars? Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Business Performance (000s) Company Earnings before taxes (local currency) Less corporate income taxes Net profits of individual subsidiary Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ Business Performance (000s) Earnings before taxes (EBT) Corporate income tax rate Average exchange rate for the period U.S. Parent (US$) $4,500 35% Brazilian Subsidiary (R$) R$ 6,250 25% R$1.8/$ German Subsidiary () 4,500 40% 0.7018/$ Chinese Subsidiary () 2,500 30% 7.75/$ Americo must pay corporate income tax in each country in which it currently has operations. a. After deducting taxes in each country, what are America's consolidated earnings and consolidated earnings per share in U.S. dollars? All MNEs attempt to minimize their global tax liabilities. Answer the following questions regarding Americo's global tax liabilities: b. What is the total amountin U.S. dollarsthat Americo is paying across its global business in corporate income taxes? c. What is Americo's effective tax rate (total taxes paid as a proportion of pre-tax profit)? d. What would be the impact on Americo's EPS and global effective tax rate if Germany instituted a corporate tax reduction to 28%, and Americo's earnings before tax in Germany rose to 5,000,000? a. After deducting taxes in each country, what are Americo's consolidated earnings and consolidated earnings per share in U.S. dollars? Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Business Performance (000s) Company Earnings before taxes (local currency) Less corporate income taxes Net profits of individual subsidiary Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $
