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ABC TRADING COMPANY OF SINGAPORE PURCHASES SPICES IN BULK FROM AROUND THE WORLD, PACKAGES THEM INTO CONSUMER SIZE QUANTITIES AND SELLS THEM THROUGH SALES AFFILIATES

ABC TRADING COMPANY OF SINGAPORE PURCHASES SPICES IN BULK FROM AROUND THE WORLD, PACKAGES THEM INTO CONSUMER SIZE QUANTITIES AND SELLS THEM THROUGH SALES AFFILIATES IN HONG KONG AND THE UNITED STATES. FOR A RECENT MONTH, THE FOLLOWING PAYMENTS MATRIX OF INTER-AFFILIATE CASH FLOWS, STATED IN SINGAPORE DOLLARS, WAS FORECASTED: DIBURSEMENTS BY SINGAPORE HONG KONG USA RECEIPTS BY SINGAPORE X 80 110 HONG KONG 16 X 44 USA 22 50 X 1. CALCULATE THE NUMBER OF TRANSACTIONS WITHOUT MULTILATERAL CASH NETTING. 2. TOTAL VALUE OF DISBURSEMENTS WITHOUT MULTILATERAL CASH NETTING. 3. CALCULATE THE NUMBER OF TRANSACTIONS WITH MULTILATERAL CASH NETTING. 4. TOTAL VALUE OF DISBURSEMENTS WITH MULTILATERAL CASH NETTING. 5. ASSUMING TRANSACTION COSTS ARE S$0.05 OF THE VALUE OF TRANSACTIONS, HOW MUCH WAS SAVED BY ABC COMPANY BY PRACTICING MULTILATERAL CASH NETTING? HINT: CREATE A TRIANGULAR DIAGRAM WITH TRANSACTION ARROWS AND FOLLOW THE LOGIC OF CASH NETTING

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