FDI Homework Tutorial 1.pdf - S3608557 Victor Garcia FDI Trade Geography Tutorial 1 A business consulting firm has affiliates in both Australia where

FDI Homework Tutorial 1.pdf - S3608557 Victor Garcia FDI...

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Victor Garcia S3608557 FDI, Trade & Geography Tutorial 1 A business consulting firm has a liates in both Australia, where the corporate income tax rate is 25 percent, and in Ireland, where the corporate income tax rate is 15 percent. Suppose the junior analysts work for the Irish a liate, while the senior consultants are based in Australia. One hour of work by an Irish analyst costs EUR 60. The Australian a liate charges its clients EUR 700 per hour of consulting services, out of which EUR 380 is paid as a salary to the senior consultants. Suppose that each hour of consulting services charged to the clients requires one hour of work by an Irish analyst. The controller of the firm is considering three possible values for the price at which the services provided by the Irish a liate are sold to the Australian a liate: (i) EUR 60 per hour. (ii) EUR 150 per hour. (iii) EUR 240 per hour.
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  • Fall '19
  • Mariko Klassing

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