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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
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 comon referencing currency.
Existing exchange rates: | ||
Swiss france (SF) = | $0.13 | |
Pound Sterling (PS)= | $1.45 | |
US to Switzerland = | $100 | |
U.S to Great Britain = | $250 | |
Switzerland to U.S | SF300 | |
Switzerland to Britain | SF 150 | |
Britain to Switzerland | PS200 | |
Britain to U.S | PS100 |
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