Glm is trying to maximize its aggregate after tax profits

Assignment Help Finance Basics
Reference no: EM131146502

Company GLM produces a product that consists of two parts. The first part is produced by a subsidiary in country A at $5 per unit. The second part is being produced by another subsidiary in country B at $7 per unit. They are assembled by another one of GLM's subsidiaries in country C at a cost of $5 per unit. 

GLM is considering selling the product in country C at $25 per unit, or selling it to country D at the same price ($25 per unit). Shipping the product to D will cost $1 per unit. The tax rates in these four countries are:

A = 15%

B = 20%

C = 10%

D = 0% (no tax)

GLM's management has to answer two questions:

(1) What transfer prices should be used by subsidiaries A and B when they charge subsidiary C? 

(2) Should the product be sold in country C or D?

Show all your calculation. GLM is trying to maximize its aggregate after tax profits.

Reference no: EM131146502

Questions Cloud

How quality customer service can impact organization culture : This question provides you with an opportunity to analyze the advantages of an organization that offers quality customer service. First, describe what it means to you to provide quality customer service for both internal customers and also externa..
Why does your selected managers organisation exist : Why does your selected manager's organisation exist? Who are the customers it serves, and what products/services does it provide them with? Based on what you have learned from interviews, observation, and any other research that you have carried out ..
What was the corporations net sales : What was the corporation's net sales, cost of goods sold, and gross profit?- What was the corporate tax rate?- What was the corporation's net interest expense?
Find the tension in the rope : An acrobat weighing 120 lb walks on a tightrope, as shown in Fig. 2.69. If the natural frequency of vibration in the given position, in vertical direction, is 10 rad/sec, find the tension in the rope.
Glm is trying to maximize its aggregate after tax profits : What transfer prices should be used by subsidiaries A and B when they charge subsidiary C? Should the product be sold in country C or D? Show all your calculation. GLM is trying to maximize its aggregate after tax profits
Do you consider this trend to be favorable : Duncan Inc. reported 2011 earnings per share of $3.26 and had no extraordinary items. In 2012, earnings per share on income before extraordinary items was $2.99, and earnings per share on net income was $3.49.
Choose healthcare provider or healthcare facility : Based on information from the Websites we have viewed and discussed, how might this information affect your decision to choose a healthcare provider or healthcare facility? For each journal post throughout the course you will be expected to discuss t..
Prepare schedule computing the amount of inventory fire loss : Prepare a schedule computing the amount of inventory fire loss. The supporting schedule of the computation of the gross profit should be in good form.
Critically analyse a famous speech : Critically analyse a famous speech and structurally compare it with a statement by the head of a company. Please be advised that for Assignment, you have to select  any ONE  letter/report/address in the annual report of your chosen company which m..

Reviews

Write a Review

Finance Basics Questions & Answers

  Earnings per share computations

Cabana Corporation has 400,000 shares of common stock outstanding throughout 2013. In addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2011. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/14. During t..

  Explain how the firm''s dividend policy and level

Explain how the firm's dividend policy and level of debt affect its ability to grow over time.

  Price for a patient service

In this Discussion, examine the steps that go into setting a price for a patient service. Consider choosing a specific patient service and describe how you, as the health care manager, would set the price for this service.

  What would be the annual interest rate from that company

A payday loan company charges 6 percent interest for a two-week period. What would be the annual interest rate from that company?

  Identify some of the alternative sources for leverage borrow

Identify some of the alternative sources for leverage borrowing

  How can specializing in lending help to reduce

How can specializing in lending help to reduce the adverse selection problem in lending?

  Calculate minimum price per unit

Assume Educate Comp knows its fixed costs are $100,000, its variable expenses are $500 per copy of Alge Comp, and they must to sell 15000 copies of Alge Comp to break even 1st year.

  Describe the two major ratio components that comprise

Describe ROA. Describe the two major ratio components that comprise the venture's ROA model.

  Complete the following exercise submit journal entries in

complete the following exercise. submit journal entries in an excel file and written segments in an ms word document.

  Average customer payment

A Corporation is considering on using a lock box system to speed up collections from its customers on the East Coast. A bank in Philadelphia will provide the service for an yearly fee of $25,000 plus ten cents per transaction

  What are the expected return and standard deviation

What are the expected return and standard deviation of a portfolio with half of its funds invested in each of these securities?

  An economic loss explain

Three years ago, you entered into a five-year interest rate swap agreement by agreeing to pay a fixed rate of 7 percent in exchange for six-month LIBOR. If your counterparty were to default today when the fixed rate on a new two-year swap is 6.5 ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd