19. Continue the assumption in question 18. However, now Nissan America considers charging Nissan Japan for 120 per EV (unit). If so, what are the combined net profits and the total corporate tax of all Nissans (per week)? ONet profit-3500; Sum of corporate tax=1500 Net profit=70; Sum of corporate tax=25 Net profit=3212.5; Sum of corporate tax=1212.5 ONet profit=0; Sum of corporate tax=1212.5 20. Now Nissans consider two options as what have found in question 18 and 19. Which of the following option will be all Nissans' final decision? O Nissan America sells at the price of 20 per EV (unit) to Nissan Japan. Nissan America sells at the price of 120 per EV (unit) to Nissan Japan.

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19. Continue the assumption in question 18. However, now Nissan
America considers charging Nissan Japan for 120 per EV (unit). If so,
what are the combined net profits and the total corporate tax of all
Nissans (per week)?
Net profit-3500; Sum of corporate tax=1500
Net profit=70; Sum of corporate tax=25
Net profit=3212.5; Sum of corporate tax=1212.5
ONet profit=0; Sum of corporate tax=1212.5
20. Now Nissans consider two options as what have found in question
18 and 19. Which of the following option will be all Nissans' final
decision?
O Nissan America sells at the price of 20 per EV (unit) to Nissan Japan.
O Nissan America sells at the price of 120 per EV (unit) to Nissan Japan.
*1
Transcribed Image Text:19. Continue the assumption in question 18. However, now Nissan America considers charging Nissan Japan for 120 per EV (unit). If so, what are the combined net profits and the total corporate tax of all Nissans (per week)? Net profit-3500; Sum of corporate tax=1500 Net profit=70; Sum of corporate tax=25 Net profit=3212.5; Sum of corporate tax=1212.5 ONet profit=0; Sum of corporate tax=1212.5 20. Now Nissans consider two options as what have found in question 18 and 19. Which of the following option will be all Nissans' final decision? O Nissan America sells at the price of 20 per EV (unit) to Nissan Japan. O Nissan America sells at the price of 120 per EV (unit) to Nissan Japan. *1
18. Suppose that corporate income tax in Japan is 30% for large
enterprises. And one of them is Nissan Japan. Assume that Nissan
Japan places its electric vehicles (EV) factory in California, USA by
setting up Nissan America. California charges enterprises with a 10%
corporate (flat) income tax rate. Suppose the demand of Nissan EV in
Japan is p=220-2Q (p: price in one hundred thousand yen, Q is number
of EV per week). Costs of transporting EV cars from California to
Japanese customers and taxes and fees related to export-import
activities are assumed to be zero. Its production cost in California is
constant at 20 per unit. If Nissan American sells EVS produced in
California to Nissan Japan at its production cost, what are the combined
net profits of all Nissans and total corporate income tax the Nissan
Japan has to pay (per week)? (Note: Nissan Japan will use the transfer
price as its marginal cost.)
ONet profit=5000; Sum of corporate tax=1500
Net profit=3500; Sum of corporate tax=1500
ONet profit=70; Sum of corporate tax=30
Net profit=3500; Sum of corporate tax=30
Transcribed Image Text:18. Suppose that corporate income tax in Japan is 30% for large enterprises. And one of them is Nissan Japan. Assume that Nissan Japan places its electric vehicles (EV) factory in California, USA by setting up Nissan America. California charges enterprises with a 10% corporate (flat) income tax rate. Suppose the demand of Nissan EV in Japan is p=220-2Q (p: price in one hundred thousand yen, Q is number of EV per week). Costs of transporting EV cars from California to Japanese customers and taxes and fees related to export-import activities are assumed to be zero. Its production cost in California is constant at 20 per unit. If Nissan American sells EVS produced in California to Nissan Japan at its production cost, what are the combined net profits of all Nissans and total corporate income tax the Nissan Japan has to pay (per week)? (Note: Nissan Japan will use the transfer price as its marginal cost.) ONet profit=5000; Sum of corporate tax=1500 Net profit=3500; Sum of corporate tax=1500 ONet profit=70; Sum of corporate tax=30 Net profit=3500; Sum of corporate tax=30
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