Question
In: Finance
Cemerlang Inc. is a conglomerate company which has four subsidiaries located in Brunei, Malaysia, United Kingdom,...
Cemerlang Inc. is a conglomerate company which has four subsidiaries located in Brunei, Malaysia, United Kingdom, and Switzerland. The exchange rates available for the company are MYR2.9000/BND, GBP0.4000/BND and BND1.2500/CHF. The following is the inter- subsidiary payments matrix for Cemerlang Inc in multiple currency.
|
RECEIVING |
PAYING SUBSIDIARY (in millions) |
|||
|
SUBSIDIARY (in millions) |
Brunei |
Malaysia |
United Kingdom |
Switzerland |
|
Brunei |
MYR58 |
GBP10 |
CHF12.5 |
|
|
Malaysia |
BND10 |
GBP12 |
CHF16.25 |
|
|
United Kingdom |
BND 20 |
MYR29 |
CHF 20 |
|
|
Switzerland |
BND15 |
MYR43.5 |
GBP6 |
|
- Perform multilateral netting by filling up the table below. If the transaction cost is 2%, how much the company need to pay (in BND) if they decided to do multilateral netting?
|
RECEIVING |
PAYING SUBSIDIARY (BND in millions) |
|||||
|
SUBSIDIARY (BND in millions) |
Brunei |
Malaysia |
United Kingdom |
Switzerland |
Total receipt |
Total Receipt/ (payment) |
|
Brunei |
||||||
|
Malaysia |
||||||
|
United Kingdom |
||||||
|
Switzerland |
||||||
|
Brunei |
||||||
Transaction cost in BND with multilateral netting:
Solutions
Expert Solution
| RECEIVING SUBSIDIARY:BRUENI | ||||||||
| A | Calculation | |||||||
| Paying Subsidiary | Amount in BND | |||||||
| Malayasia | 20 | (58/2.9000) | ||||||
| United Kingdom | 25 | (10/0.4000) | ||||||
| Switzerland | 15.625 | (12.5*1.2500) | ||||||
| RECEIVING SUBSIDIARY:MALAYASIA | ||||||||
| Paying Subsidiary | Amount in BND | Calculation | ||||||
| United Kingdom | 30 | (12/0.4000) | ||||||
| Switzerland | 20.3125 | (16.25*1.25) | ||||||
| RECEIVING SUBSIDIARY:UNITED KINGDOM | ||||||||
| Paying Subsidiary | Amount in BND | Calculation | ||||||
| Malayasia | 10 | (29/2.9000) | ||||||
| Switzerland | 25 | (20*1.25) | ||||||
| RECEIVING SUBSIDIARY:SWITZERLAND | ||||||||
| Paying Subsidiary | Amount in BND | Calculation | ||||||
| Malayasia | 15 | (43.5/2.9000) | ||||||
| United Kingdom | 15 | (6/0.4) | ||||||
| PAYING SUBSIDIARY | ||||||||
| RECEIVING SUBSIDIARY | Brunei | Malayasia | United Kingdom | Switzerland | TOTAL | |||
| Brunei | X | 20 | 25 | 15.625 | 60.625 | |||
| Malayasia | 10 | X | 30 | 20.3125 | 60.3125 | |||
| United Kingdom | 20 | 10 | X | 25 | 55 | |||
| Switzerland | 15 | 15 | 15 | X | 45 | |||
| TOTAL | 45 | 45 | 70 | 60.9375 | 220.9375 | |||
| Company need to pay transaction cost | 4.41875 | MillionBND | (220.9375*2%) | |||||
jeff jeffy answered 2 years agoRelated Solutions
Cemerlang Inc. is a conglomerate company which has four subsidiaries located in Brunei, Malaysia, United Kingdom,...
Cemerlang Inc. is a
conglomerate company which has four subsidiaries located in Brunei,
Malaysia, United Kingdom, and Switzerland. The exchange rates
available for the company are MYR2.9000/BND, GBP0.4000/BND and
BND1.2500/CHF. The following is the inter- subsidiary payments
matrix for Cemerlang Inc in multiple currency.
RECEIVING
PAYING SUBSIDIARY (in
millions)
SUBSIDIARY
(in millions)
Brunei
Malaysia
United Kingdom
Switzerland
Brunei
MYR58
GBP10
CHF12.5
Malaysia
BND10
GBP12
CHF16.25
United Kingdom
BND 20
MYR29
CHF 20
Switzerland
BND15
MYR43.5
GBP6
Convert all the cash...
Cemerlang Inc. is a conglomerate company which has four subsidiaries located in Brunei, Malaysia, United Kingdom,...
Cemerlang Inc. is a conglomerate company which has four
subsidiaries located in Brunei, Malaysia, United Kingdom, and
Switzerland. The exchange rates available for the company are
MYR2.9000/BND, GBP0.4000/BND and BND1.2500/CHF. The following is
the intersubsidiary payments matrix for Cemerlang Inc in multiple
currency.
RECEIVING
SUBSIDIARY
(in millions)
PAYING SUBSIDIARY (in million)
Brunei
malaysia
UK
Switzerland
Brunei
MYR58
GBP10
CHF12.5
malaysia
BND10
GBP12
CHF16.25
UK
BND20
MYR29
CHF20
Switzerland
BND15
MYR43.5
GBP6
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available for the company are MYR2.9000/BND, GBP0.4000/BND and
BND1.2500/CHF. The following is the inter- subsidiary payments
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RECEIVING
PAYING SUBSIDIARY (in
millions)
SUBSIDIARY
(in millions)
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Malaysia
United Kingdom
Switzerland
Brunei
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GBP10
CHF12.5
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CHF16.25
United Kingdom
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MYR29
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MYR43.5
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