____ can cause the parent's aFter-tax cash flows to differ from the subsidiary's aFter-tax cash flows.

Question

Quizplus · Accepted Answer

Withholding taxes imposed by the host government can cause differences between the parent's after-tax cash flows and the subsidiary's after-tax cash flows. This is because the subsidiary's profits may be subject to withholding taxes when repatriated to the parent company, reducing the amount of cash available for the parent. The other options (A, B, and C) may affect the subsidiary's profitability or tax liability, but do not necessarily cause differences between the parent and subsidiary's after-tax cash flows.

____ Can Cause the Parent's AFter-Tax Cash Flows to Differ