In which of the following situations would tax rate differences among countries be most important for deciding where to place an investment?
A)Companies find advantages in being located near specialized private and public institutions.
B)Companies must compare the benefits of labor- versus capital-intensive production.
C)Companies want to serve an entire region within a regional trading bloc.
D)Companies must deal with difficult start-up regulations.

Question

Quizplus · Accepted Answer

When companies want to serve an entire region within a regional trading bloc, tax rate differences among countries become an essential factor while making investment decisions. Companies prefer to invest in countries with lower tax rates to gain cost advantages and offer their products or services at competitive prices in the region. Therefore, the tax rate differences play a crucial role in deciding the investment location.

In Which of the Following Situations Would Tax Rate Differences