Finance and Financial Management Commons^™

Evaluating The Effect Of Corporate Tax Reductions On Value Chain Sourcing Decisions, James Mohs, Arthur Galloway

Accounting Faculty Publications

The objective of this paper is to evaluate the changes in the elements of the value change sensitivity model and identify if there has been a significant shift in the profitability of one country to another. Validating the work on the adjusted present value (APV) formula provided by Rainish, Mensz, and Mohs (2015), this paper analyzes how the new U.S. corporate tax rates will impact a company’s sourcing decision. Also, the value-added tax (VAT) is used in all other OECD countries, except the U.S, and therefore this will be part of the evaluation. The third variable that has a crucial …