Question
In: Finance
2. A multinational company has three subsidiaries located in the United States, Switzerland, and Great Britain. The...
2. A multinational company has three subsidiaries located in the United States, Switzerland, and Great Britain. The company recently set up a multilateral netting center to help manage its foreign exchange exposure. Listed below are the average monthly invoices sent from each country to each of the other subsidiaries with which it does business. Calculate the net flows that will occur as a result of the new netting system. The company uses the U.S. dollar as the common referencing currency.
Existing Exchange Rates:
Swiss franc (SF) = $0.13
Pound sterling (PS) = $1.45
United States to Switzerland $100
United States to Great Britain $250
Switzerland to United States SF300
Switzerland to Great Britain SF150
Great Britain to Switzerland PS200
Great Britain to United States PS100
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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PAYING SUBSIDIARY (in
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PAYING SUBSIDIARY (in
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RECEIVING
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PAYING SUBSIDIARY (in million)
Brunei
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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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