When a company incorporated in a country with a high tax rate does business in countries with lower tax rates, it will report an effective tax rate below its statutory rate.

a. Is the difference sustainable into the future?

b. What occurs if the company decides to repatriate earnings?

c. How should operating taxes be computed in the year of repatriation?

d. How is ROIC distorted by foreign taxation and repatriation?

e. One of the most common deferred-tax liabilities occurs because of accelerated depreciation. When is the difference between reported taxes and cash taxes likely to be greatest? When will it be smallest? Can it reverse? That is, can cash taxes be higher than reported taxes?