ohnston Industries is in the process of deciding where to establish a European manufacturing operation: France, Germany, and Switzerland.Johnston Industries' home country does not have a tax treaty with any of these countries.Regardless of location, the operation is expected to generate a pretax income of 500,000 euros annually.The operation will distribute 100% of its after-tax income to Johnston Industries as a dividend each year.

Using the following income tax and withholding rates, determine the net amount of the dividend that Johnston Industries would receive annually from an investment in each of these three countries and determine which country should Johnston Industries location its European operations.

France. Germany Switzerland

Income tax rate 33.33%. 29.48%. 21.17%

Witholdings rate:

Dividends. 30.00%. 25.00%. 35.00%

Interest 0.00%. 0.00%. 35.00%

Royalties. 33.33%. 15.00%. 0.00%