The management of Nixon Company must decide between locating a new branch office in foreign Jurisdiction For foreign Jurisdiction G. Regardless of location, the branch operation will use tangible property (plant and equipment) worth $10 million and should generate annual gross receipts of $2 million., Jurisdiction F imposes an annual property tax of 4 percent of the value of business property and a 15 percent gross receipts tax. Jurisdiction G imposes no property tax but imposes a 30 percent gross receipts tax. Required: a. Compute the tax costs of operating in both jurisdictions. b. Solely on the basis of these facts, should Nixon locate its new branch in Jurisdiction For Jurisdiction G?

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