Question
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
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? (8 marks)
| 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:
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Handbook Of Consumer Finance Research
Authors: Jing Jian Xiao
2nd Edition
3319288857, 978-3319288857
