Cemerlang Inc. is a conglomerate company which has four subsidiaries located in Brunei, Malaysia, United...
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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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