Please help!! Here is the feedback from my professor and the original assignment is uploaded with my answers.
Professors feedback:
Part 1, you did not provide after tax cash flow here. What you provided is for Q1 without the after tax rate.
You need to complete part 1 under $5 option for Vietnam portion and for the U.S. transfer portion.
| Total: | United States | Vietnam | |||||
| Income tax rate | ? | 21% | 12% | ||||
| Import duty rate | ? | 20% | —— | ||||
| Withholding tax rate on dividends | ? | ———- | 6% | ||||
You need to have table for $6 option as well they are all under:
| total: | United States | Vietnam | |||||||
| Income tax rate | 21% | 12% | |||||||
| Import duty rate | 20% | —— | |||||||
| Withholding tax rate on dividends | ———- |
6% |
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After that, you need zero tax rate for the second question. You cannot sum up in just 1 column. Please redo and upload a new copy for grading.
Q2: you need to complete the second portion for this option zero % tax rate.
Please make sure to upload again for grading.
| Now assume that the withholding tax rate on dividends is 0 percent. Determine the transfer price within the arm’s-length range that would maximize Saint Leo Corp’s after-tax cash flow from the sale of insulated wire in the United States |
