Nexnew Systems Inc. is a Canada-based MNC that manufacturers satellite equipment. of $100,000 before foreign taxes. All after-tax earnings are to be paid to the parent as dividends. The foreign taxes include anincome tax rate of 35 percent and a dividend withholding tax of 15 percent. The firm's marginal tax rate in Canada is 45 percent. The taxes paid to the Canadian government would be

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The taxes paid to the Canadian government would be $0 because the foreign tax credit for the income tax and withholding tax paid abroad would offset the Canadian tax liability.