Please explain why chose what you choose. Which of the following statements conc
ID: 2753541 • Letter: P
Question
Please explain why chose what you choose.
Which of the following statements concerning multinational cash flow analysis is not correct?
A. The relevant cash flows are the dividends and royalties repatriated to the parent company.
B. The cash flows must be converted to the currency of the parent company and, thus, are subject to future exchange rate changes.
C. Dividends and royalties received are normally taxed only by the government of the country in which the subsidiary is located.
D. Foreign governments may restrict the amount of the cash flows that may be repatriated.
Explanation / Answer
Option C is not correct. Remaining all statements are correct
Dividends and royalties received are also be taxed at the country in which parent company is located. Only the taxes paid by the subsidiary to its local government are not taxed by US government.
Statement A, B and D are correct and they are self explanatory.