Question
1 -Consider Breida Co, a U.S.-based MNC with foreign subsidiaries in Canada, France, and Japan. The following inter-subsidiary payment matrix summarizes the payments each subsidiary
1 -Consider Breida Co, a U.S.-based MNC with foreign subsidiaries in Canada, France, and Japan. The following inter-subsidiary payment matrix summarizes the payments each subsidiary owes to the other subsidiaries (for supplies, for example).
Payment Owed by Subsidiary Located In | U.S. Dollar Value Owed to Subsidiary Located in | ||
---|---|---|---|
Canada | France | Japan | |
($, Thousands) | ($, Thousands) | ($, Thousands) | |
Canada | 100 | 30 | |
France | 40 | 90 | |
Japan | 40 | 90 |
For example, row one of the matrix states that the Canadian subsidiary owes $100 (thousand) to the French subsidiary and $30 (thousand) to the Japanese subsidiary.
Complete the following netting schedule, filling in the net payments from each subsidiary, to each subsidiary. If the answer is zero, enter 0.
Payment Owed by Subsidiary Located In | U.S. Dollar Value Owed to Subsidiary Located in | ||
---|---|---|---|
Canada | France | Japan | |
($, Thousands) | ($, Thousands) | ($, Thousands) | |
Canada | ----------- | $ | $ |
France | $ | ----------- | $ |
Japan | $ | $ | --------- |
Consider two subsidiaries, A and B, of the same parent.
Suppose that subsidiary A purchases supplies from subsidiary B and pays for those supplies earlier than necessary.
2 -True or False: This cash transfer technique is referred to as lagging.
True
False
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