o Apple Inc. Has a manufacturing affiliate in Country A that incurs costs of $600,000 for goods that it sells to its sales affiliate in Country B. The sales affiliate (country B) resells these goods to final consumers for $2,500,000. Both affiliates incur operating expenses of $300,000 each. Country A incurred selling and administrative expenses of $80,000. Country B incurred $200,000 of administrative expenses. Country A corporate income tax rate is 35% Country B levies 30 % on taxable corporation income tax in their jurisdictions. Required: a. If Apple Inc. Increased the aggregated transfer prices to its sales affiliates an increment from $1,500,000 to $2,000,000, What is the effect on the consolidated taxes? Sales Cost of sales Gross profit Operating expenses Selling and admin expenses Net income Income tax (35/30%) (5 Marks) Country A Low Transfer Price (000s omitted) Country B Consolidated