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Exercise 15-26 International Transfer Prices: Ethical issues (LO 15-44 Trans Atlantic Metal has two operating divisions. Its forging operation in Finland forgea row metal, us,

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Exercise 15-26 International Transfer Prices: Ethical issues (LO 15-44 Trans Atlantic Metal has two operating divisions. Its forging operation in Finland forgea row metal, us, and the ship it to the United States where the companys Gew Division uses the metal to produce the gears. Operating expenses amount to $20.5 million in Finland and $605 million in the United States exclusive of the costs of any goods anterred from Fland Ravenues in the United States $156 min of the metal were purchased from one of the company's U.S.forging division, the costs would be $30.5 million. However, it had been purchased from an dependent Finish supplier the cost would be $405 milion. The marginal income tax rate is 70 percent in Finland and 30 percent in the United States Required: What is the company's total tax liability to both junadictions for each of the two alternative transfer pricing scenarios (530.5 million and $40.5 million (Enter your answers in dollars and not in millions of dollars) Transfer price 30.5 million 40.5 million Total tax liability

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