Question
Rocha which located in Switzerland has two subsidiaries in Denmark and Germany. The current exchange rate is DKK6.5000/CHF and CHF0.8700/EUR. Below is the intersubsidiary payments
- Rocha which located in Switzerland has two subsidiaries in Denmark and Germany. The current exchange rate is DKK6.5000/CHF and CHF0.8700/EUR. Below is the intersubsidiary payments matrix (in different currencies of thousands) that totals each subsidiarys individual payments to each of the other subsidiaries.
| Receiving Subsidiaries | Paying Subsidiaries | ||
| Switzerland | Denmark | Germany | |
| Switzerland | -
| CHF 78,000 | CHF44,000 |
| Denmark | DKK455,000
| - | DKK195,000 |
| Germany | EUR43,500
| EUR78,300 | - |
Convert all the cash flows into CHF and fill in the Table A. Then perform bilateral netting and compute the total receipt, total disbursement, and net receipt (in CHF) for each entity and fill in Table B. If the transaction cost is 2%, how much the company has to pay for transaction cost if they decide to perform multilateral netting?
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Empirical Techniques In Finance
Authors: Ramaprasad Bhar, Shigeyuki Hamori
1st Edition
3642064175, 978-3642064173
