Jalan Corporation operates in countries A and B. Country A has a 40% income tax rate. Country B has a 30% income tax rate. Jalan Corp produces 500,000 units of part X in country A and transfers the entire lot to its plant in country B. Part X can be transferred at a price of $100 or $85 per unit. Assume that the company chooses the lower transfer price. The net tax effect for the company from this choice when compared to choosing the higher transfer price is:

		an increase in total taxes of $0.75 million
		an increase in total taxes of $1.8 million
		an increase in total taxes of $1.2 million
		a reduction in total taxes of $1.2 million
		a reduction in total taxes of $2.25 million
		a reduction in total taxes of $0.75 million