I need help answering problem 1a.

1. In one quarter, the US affiliate made 18 purchases from the Japan affiliate totaling 27.44 million and the Japan affiliate made 6 purchases from the US affiliate totaling $37 thousand.

a. If the US and Japan affiliates make a separate remittance for each of these invoices, what will the total cost of the remittances for these purchases during this quarter be?

FIN 4180 International Finance Spring 2016 Assignment 11 Inter-affiliate transactions and cost of remittances Due: April 20, 2016 You can do this assignment alone or with others. If you work with others, only one person should submit your work but be sure the names of all that contributed appear on the submission. A company has affiliates in seven countries. Each affiliate enters into transactions with the other affiliates in the course of business. The company has determined that on average a remittance from one affiliate to another costs $40. This costs includes bank fees for international funds transfer, costs in each affiliate to process the payment/receipt, and average cost to exchange currency. 1. In one quarter, the US affiliate made 18 purchases from the Japan affiliate totaling 27.44 million and the Japan affiliate made 6 purchases from the US affiliate totaling $37 thousand. a. If the US and Japan affiliates make a separate remittance for each of these invoices, what will the total cost of the remittances for these purchases during this quarter be? b. How much money can the company save on transaction costs for these two affiliates during the quarter if instead of remitting each invoice separately, the US affiliate makes a single remittance to the Japan affiliate that covers the total due on all 18 invoices for the quarter and the Japan affiliate makes a single remittance to the US affiliate to cover all 6 invoices? c. If each of the seven affiliates averages 12 purchases from each other affiliates during a quarter, what is the transaction cost savings if each affiliate aggregates the invoices payable to each respective other affiliate and makes a single remittance to each for the total due for that quarter. Payor 2. The following table indicates the aggregate quarterly invoices (in US$) between each affiliated company for a recent quarter. Payee Australia Belgiu German Japan Singapor UK US m y e Australia 228 99 272 170 139 298 Belgium 15 240 9 190 238 95 Germany 125 153 220 272 294 216 Japan 197 9 217 282 211 144 Singapore 278 294 59 220 160 65 UK 70 47 86 247 281 260 US 93 298 296 186 6 94 a. If each company makes a single remittance to each other affiliate of the aggregate amount due for the quarter (as described in question 1), what will the company's total cost for remittances be? b. If the affiliates use bi-lateral netting, what payments should be made and what is the total cost of all remittances. 3. If for the quarter indicated in question 2, the company used multi-lateral netting, what remittances would be made by each affiliate to each other affiliate for the quarter, and what is the total cost of all remittances. 4. If the company used a central depository/re-invoicing center, the aggregate cost of all remittances would likely be higher than with multi-lateral (and possibly bi-lateral) netting. What advantages may indicate that using a central depository/re-invoicing center is valuable despite that slightly greater cost