FOR QUESTIONS 6 AND 7: ForCo, a corporation that is incorporated in a foreign country and does not have a treaty with the U.S., plans to conduct manufacturing, marketing, and sales operations in the U.S. These U.S. operations produce $5 million of earnings and profits in Year 1. Further assume that the U.S. operations will have a net worth of $20 million at the beginning of Year 1 and $20 million at the end of Year 1. During Year 2, the U.S. branch does not produce any earnings and profits and its net worth is $20 million at the beginning of the year and $10 million at the end of the year.

6) For branch profits tax purposes in Year 1, the dividend equivalent amount for the U.S. branch is as follows:

	a.	$5 million
	b.	$10 million
	c.	$20 million
	d.	$25 million
	e.	$1.5 million

7) For branch profits tax purposes in Year 2, the dividend equivalent amount for the U.S. branch is as follows:

	a.	$5 million
	b.	$10 million
	c.	$20 million
	d.	$25 million
	e.	$3 million