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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
22.  LO.3 Create, Inc., produces inventory in its foreign manufacturing plants for sale in the United States. Its foreign manufacturing assets have a tax book value of
$5 million and a fair market value of $15 million. Its assets related to the sales activ-
ity have a tax book value of $2 million and a fair market value of $5 million. Create’s interest expense totaled $400,000 for the    current year.
a.     What amount of Create’s interest expense is allocated and apportioned to foreign- source income using the tax book value method? Using the fair market    method?
b.    If Create wants to maximize its FTC, which method should it use?
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