What is the incremental cash flow per month

Assignment Help Corporate Finance

Reference no: EM132208248

Question - Arco ships 15 million barrels of refined oil monthly from Arco-Canada to Arco-U.S. Arco-U.S. has to pay a U.S. ad valorem tariff of 6%. Tax accountants advise Arco that it can set the transfer price in the range of $15-$18 per barrel of product. The current price is set at $16 a barrel. If Arco-Canada's tax rate is 50%, the U.S. rate is 46%, what is the incremental cash flow per month associated with using the optimal transfer price?

a) $236,000

b) $1,343,000

c) $1,086,000

d) $32,670

Reference no: EM132208248

Questions Cloud

What does the term shared leadership mean : Over the years, the style and practice of leadership within law enforcement agencies has gradually changed.

What is the portfolio VaR : The portfolio has MOP 2 million invested in the USD and MOP 3 million in the EUR. Assume that the two currencies are uncorrelated, what is the portfolio VaR

Find the market long run expectation : Suppose that the nominal interest rates in the U.S. and Mexico are, respectively, 6% and 10%, the real interest rate is 3% in the U.S. and 5% in Mexico.

Evaluate the government budget : Evaluate the government budget. Suppose that congress decides to adjust government purchases in order to achieve a balanced budget.

What is the incremental cash flow per month : If Arco-Canada's tax rate is 50%, the U.S. rate is 46%, what is the incremental cash flow per month associated with using the optimal transfer price

Compare the effectiveness of classic models : Evaluate at least two classic models that are used in providing structure for database solutions.

Calculate the initial conversion price : Conversion ratio: Each bond of par value of $100,000 is convertible into 5,000 ordinary shares. Calculate the initial conversion price

Identify and evaluate at least three considerations : Identify and evaluate at least three considerations that one must plan for when designing a database.

How do you see a decision support system aiding business : In your experience, have you found an effective decision making process useful in all situations? Explain why or why not.

User Account

All Pages