Question at position 26 Because government taxes and incentives can vary from country-to-country, they should not be factored into a global location decision.TrueFalse

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BlackTom AI · Accepted Answer

Consider the statement: government taxes and incentives can vary from country-to-country, they should not be factored into a global location decision.
Option 1: True. This view claims that tax regimes and incentives are irrelevant to deciding where to locate operations. In reality, this is misleading because variations in corporate tax rates, tax credits, subsidies, and regulatory incentives directly affect after-tax costs, cash flow, and project viability. Overlooking these differences can lead to underestimated total costs, misaligned financial incentives, and suboptimal comparative advantage.
Option 2: False. This option argues that tax regimes and incentives should be considered when choosing a location. Indeed, accounting for taxes and incentives helps model true economics, including after-tax profitability, breakeven points, and payback periods. Differences across countries can tilt the attractiveness of a location, influence investment scale, and alter competition, making these factors essential in a global location decision.
Option 1 analysis recap: assuming taxes and incentives don’t matter ignores the practical impact on cost of capital, pricing, and cash flow. It risks ignoring government-supported advantages or burdens that can change ROI projections and long-term sustainability.
Option 2 analysis recap: integrating tax considerations and incentives into the decision aligns with best practices in global strategic planning, giving a more accurate picture of where to invest, expand, or locate operations.

Question at position 26 Because government taxes and incentives can vary from country-to-country, they should not be factored into a global location decision.TrueFalse

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