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You are a shoe manufacturer is USA exporting to South Africa. You have set up your own subsidiary in South Africa. Corporate Tax Rate in
You are a shoe manufacturer is USA exporting to South Africa. You have set up your own subsidiary in South Africa. Corporate Tax Rate in USA is 35%. Corporate Tax rate in South Africa is 25%. Your cost of production is $100.0 per shoe pair. The market price at which your subsidiary can sell shoe in South Africa is $200.0; You first want to sell your merchandise to your subsidiary who will then sell it to the customers in South Africa. What should be your price to your subsidiary? Group of answer choices As close to $100.00 (more than $100.0 of course), your cost of production as possible; As close to $200 (less than $200, of course), the final market price It does not really matter as subsidiary is owned by our own company anyway
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