Now, suppose the income tax rate in A is 40 percent, while in B it is 20 percent. What will be combined profit be if all other numbers are the same as in a?

Analytical Report

Write a short analytical report (4-5 pages) on mergers. Discuss the economic justification for a merger. In particular, how might these reasons apply to companies now merging in the following industries: oil, automobiles, telecommunications, electric power, and commercial banks? There are several major mergers in the news right now including DOW & Dupont and AT&T & Time Warner. Explain why these mergers are subject to government regulation and approval. Present a view point as to whether you think they should be subject to those regulations.

You must present research and evidence in this paper with a minimum of 4 external resources in addition to the text book. Those resources must be cited with appropriate APA references.

The format below is recommended for the essay portion of your paper.

1. Cover page (See APA Sample paper)
2. Introduction
   1. Purpose of paper
   2. Thesis sentence
3. Body (Cite sources using in-text citations.)
   1. Main point 1
      1. Example or evidence
      2. Evidence (support from the literature)
      3. Student’s original thoughts and ideas about the section’s content and a concluding thought
   2. Main point 2
      1. Example or evidence
      2. Evidence (support from the literature)
      3. Student’s original thoughts and ideas about the section’s content and a concluding thought
   3. Main point 3
      1. Example or evidence
      2. Evidence (support from the literature)
      3. Student’s original thoughts and ideas about the section’s content and a concluding thought
4. Conclusion – Summary of main points
   1. Lessons Learned and Recommendations as needed
5. References – List the references you cited in the text of your paper according to APA format.

(Note: Do not include references that are not cited in the text of your paper)

1. – Quantitative Analysis Case

Write a Quantitative Analysis report on the following problems:

The XYZ Multinational Corporation has manufacturing facilities in country A and an assembly plant in country B. The company ships manufactured units from its plant in A to its assembly plant in B.

1. In April 2013, the company ships 1,000 units with a production cost of 65 per unit to its plant in country B. Its operating expenses in A are 15,000 for the month. The income tax rate in A is 20 percent and in B 40 percent. The company plans to have a transfer price of 100 per unit. The final product can be sold in B for 140. B’s operating expenses are 10,000 during the month. How much will the combined profits be of the two operation in April 2.13?
2. Could the company benefit by changing the transfer price to 120?
3. Now, suppose the income tax rate in A is 40 percent, while in B it is 20 percent. What will be combined profit be if all other numbers are the same as in a?
4. What would be the result in c if the company decreased its transfer price to 90?

PART 3

Describe the additional complications facing an MNC compared with a domestic corporation when it is evaluating a capital budgeting project. Why should an MNC’s capital budgeting decision be based on the parent’s results rather than those of the subsidiary? Is an MNC generally faced with incurring double taxation on its profits in the subsidiary’s country? Why or why not? ONLY NEED TO BE 150 WORDS