management of nixon company must decide between locating a new branch office in foreign jurisdiction f or…

management of nixon company must decide between locating a new branch office in foreign jurisdiction f or foreign jurisdiction g. regardless of location, the branch operation will use tangible property (plant and equipment) worth $10.8 million and should generate annual gross receipts of $2.4 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.\nrequired:\na. compute the tax costs of operating in both jurisdictions.\nb. solely on the basis of these facts, should nixon locate its new branch in jurisdiction f or jurisdiction g?\ncomplete this question by entering your answers in the tabs below.\nrequired a\nrequired b\ncompute the tax costs of operating in both jurisdictions.\nnote: enter your answers in dollars not in millions of dollars.\ntax cost of operating\njurisdiction f\njurisdiction g

management of nixon company must decide between locating a new branch office in foreign jurisdiction f or foreign jurisdiction g. regardless of location, the branch operation will use tangible property (plant and equipment) worth $10.8 million and should generate annual gross receipts of $2.4 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.\nrequired:\na. compute the tax costs of operating in both jurisdictions.\nb. solely on the basis of these facts, should nixon locate its new branch in jurisdiction f or jurisdiction g?\ncomplete this question by entering your answers in the tabs below.\nrequired a\nrequired b\ncompute the tax costs of operating in both jurisdictions.\nnote: enter your answers in dollars not in millions of dollars.\ntax cost of operating\njurisdiction f\njurisdiction g

Answer

Explanation:

Step1: Calculate tax cost in Jurisdiction F

Property tax = $10.8\times10^{6}\times0.04 = 432000$. Gross - receipts tax = $2.4\times10^{6}\times0.15=360000$. Total tax cost in F = $432000 + 360000=792000$.

Step2: Calculate tax cost in Jurisdiction G

Gross - receipts tax = $2.4\times10^{6}\times0.3=720000$.

Answer:

Tax Cost of Operating in Jurisdiction F: 792000 Tax Cost of Operating in Jurisdiction G: 720000 Based on tax - cost comparison, Nixon should locate its new branch in Jurisdiction G.