MGM102H5 Lecture Notes - Lecture 8: W. M. Keck Observatory, Ethical Dilemma
Document Summary
Small company tyco acquired johnson to maintain location outside of ireland. Johnson reduces taxes in the first year alone. If other companies/ competitors are doing it you should do it to. By merging with tyco it gives them access to european market. Making more money but that isn"t that great of a reason because revenue expenditures= net income before taxes. Then pay e. g. 30% taxes so instead of 1 million dollars, you get only 70,000 to keep. You make money after taxes so you still need to do something to reduce the tax percentage. The money left can be given as dividends back to shareholders as a return on investments or you"ll pay yourself some dividends. You can also pay debts or reinvest the money to expand operations, start new services, and grow business. Expand business, pay debt, keep reserves in organization, and pay shareholders.
