Cholati is a foreign corporation that produces fine chocolates for sale worldw

Cholati is a foreign corporation that produces fine chocolates for sale worldwide. Cholati markets it chocolates in the United States through a branch
sales office located in New York City. During the current year Cholati%u2019s effectively connected earnings and profits are $3 million and its U.S.
net equity is $6 million at the beginning of the year and $4 million at the end of the year. In addition a review of Cholati%u2019s interest expense
account indicates that it paid $440000 of portfolio interest to an unrelated foreign corporation $200000 of interest to a foreign corporation which
owns 15% of the combined voting power of Cholati%u2019s stock and $160000 of interest to a domestic corporation.

Compute Cholati%u2019s branch profi ts tax and determine its branch interest withholding tax obligations. Assume that Cholati does not reside in a
treaty country.