Filters
Question type
Study Flashcards

For the U.S. affiliate shown below, net all its inter-affiliate receipts against all its disbursements. Use the following exchange rates. For the U.S. affiliate shown below, net all its inter-affiliate receipts against all its disbursements. Use the following exchange rates. The net inter-affiliate cash flow for the U.S. affiliate is A) $0. B) -$135. C) $135. D) $405. E) $90. The net inter-affiliate cash flow for the U.S. affiliate is For the U.S. affiliate shown below, net all its inter-affiliate receipts against all its disbursements. Use the following exchange rates. The net inter-affiliate cash flow for the U.S. affiliate is A) $0. B) -$135. C) $135. D) $405. E) $90.


A) $0.
B) -$135.
C) $135.
D) $405.
E) $90.

F) A) and E)
G) C) and D)

Correct Answer

verifed

verified

Consider a U.S. MNC with three subsidiaries and the following foreign exchange transactions shown at left. Use MULTILATERAL netting to reduce the number of foreign exchange transactions. Consider a U.S. MNC with three subsidiaries and the following foreign exchange transactions shown at left. Use MULTILATERAL netting to reduce the number of foreign exchange transactions. A) B) C) D) None of the above


A) Consider a U.S. MNC with three subsidiaries and the following foreign exchange transactions shown at left. Use MULTILATERAL netting to reduce the number of foreign exchange transactions. A) B) C) D) None of the above
B) Consider a U.S. MNC with three subsidiaries and the following foreign exchange transactions shown at left. Use MULTILATERAL netting to reduce the number of foreign exchange transactions. A) B) C) D) None of the above
C) Consider a U.S. MNC with three subsidiaries and the following foreign exchange transactions shown at left. Use MULTILATERAL netting to reduce the number of foreign exchange transactions. A) B) C) D) None of the above
D) None of the above

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Which will reduce the number of foreign exchange transaction the most for a MNC?


A) Multilateral netting
B) Bilateral netting
C) Fish netting
D) None of the above

E) A) and C)
F) C) and D)

Correct Answer

verifed

verified

Many of the skills necessary for effective cash management are the same regardless of whether the firm has only domestic operations or if it operates internationally.

A) True
B) False

Correct Answer

verifed

verified

Find the net exposure of the U.S. MNC with the following intra affiliate transactions shown: Find the net exposure of the U.S. MNC with the following intra affiliate transactions shown: A) $55 B) $65 C) $800 D) None of the above


A) $55
B) $65
C) $800
D) None of the above

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

Cash management refers to


A) the decision to grant credit to customers or to remain "cash and carry".
B) the investment the firm has in transaction balances and precautionary balances.
C) a domestic firm's investment in foreign currency.
D) none of the above

E) None of the above
F) A) and D)

Correct Answer

verifed

verified

For a recent month, the following payments matrix of interaffiliate cash flows was forecasted: For a recent month, the following payments matrix of interaffiliate cash flows was forecasted: The spot exchange rates are $1.20 = €1.00 and $1.80 = £1.00; affiliates get paid in home currency. Use multilateral netting to find the net payments to and from all parties. Which of the following is an accurate chart of their current situation? A) B) C) D) None of the others. The spot exchange rates are $1.20 = €1.00 and $1.80 = £1.00; affiliates get paid in home currency. Use multilateral netting to find the net payments to and from all parties. Which of the following is an accurate chart of their current situation?


A) For a recent month, the following payments matrix of interaffiliate cash flows was forecasted: The spot exchange rates are $1.20 = €1.00 and $1.80 = £1.00; affiliates get paid in home currency. Use multilateral netting to find the net payments to and from all parties. Which of the following is an accurate chart of their current situation? A) B) C) D) None of the others.
B) For a recent month, the following payments matrix of interaffiliate cash flows was forecasted: The spot exchange rates are $1.20 = €1.00 and $1.80 = £1.00; affiliates get paid in home currency. Use multilateral netting to find the net payments to and from all parties. Which of the following is an accurate chart of their current situation? A) B) C) D) None of the others.
C) For a recent month, the following payments matrix of interaffiliate cash flows was forecasted: The spot exchange rates are $1.20 = €1.00 and $1.80 = £1.00; affiliates get paid in home currency. Use multilateral netting to find the net payments to and from all parties. Which of the following is an accurate chart of their current situation? A) B) C) D) None of the others.
D) None of the others.

E) All of the above
F) C) and D)

Correct Answer

verifed

verified

MNCs can reduce their exchange rate expense


A) by using bilateral netting.
B) by using a centralized cash management system.
C) by using multilateral netting.
D) all of the above

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Precautionary cash balances


A) represent an increasingly-important source of interest income for many MNCs.
B) are necessary in case the firm has underestimated the amount needed to cover transactions.
C) are synonymous with speculative cash balances.
D) none of the above

E) A) and C)
F) A) and D)

Correct Answer

verifed

verified

In reference to establishing "transfer prices" between the affiliates of an MNC, which of the following relates to the "resale" price approach?


A) Comparable uncontrolled price between unrelated firms.
B) The price at which the good is resold by the distribution affiliate is reduced by an amount to cover overhead costs and a reasonable profit.
C) Assumes that the manufacturing cost is readily available.
D) Is based on financial and economic models and econometric techniques.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Precautionary cash balances


A) are necessary in case the firm has underestimated the amount of cash need to cover transactions.
B) are necessary to cover scheduled outflows of funds during a cash budgeting period.
C) both a and b
D) none of the above

E) B) and D)
F) C) and D)

Correct Answer

verifed

verified

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 Unites States. For a recent month, the following payments matrix of interaffiliate cash flows, stated in Singapore dollars, was forecasted. 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 Unites States. For a recent month, the following payments matrix of interaffiliate cash flows, stated in Singapore dollars, was forecasted. Which of the following is an accurate chart of their current situation? A) B) C) D) Which of the following is an accurate chart of their current situation?


A) 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 Unites States. For a recent month, the following payments matrix of interaffiliate cash flows, stated in Singapore dollars, was forecasted. Which of the following is an accurate chart of their current situation? A) B) C) D)
B) 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 Unites States. For a recent month, the following payments matrix of interaffiliate cash flows, stated in Singapore dollars, was forecasted. Which of the following is an accurate chart of their current situation? A) B) C) D)
C) 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 Unites States. For a recent month, the following payments matrix of interaffiliate cash flows, stated in Singapore dollars, was forecasted. Which of the following is an accurate chart of their current situation? A) B) C) D)
D) 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 Unites States. For a recent month, the following payments matrix of interaffiliate cash flows, stated in Singapore dollars, was forecasted. Which of the following is an accurate chart of their current situation? A) B) C) D)

E) B) and C)
F) None of the above

Correct Answer

verifed

verified

Calculate the increase in annual after-tax profits if the higher transfer price of $1,250 per unit is used.


A) $250,000
B) $500,000
C) $1,000,000
D) $1,250,000

E) None of the above
F) A) and C)

Correct Answer

verifed

verified

The cash manager of a domestic firm should source funds internationally to obtain the lowest borrowing cost and to place excess funds wherever the greatest return can be earned regardless of currency. Given IRP and hedging opportunities this is true. See page 461. Likely a contentious question.

A) True
B) False

Correct Answer

verifed

verified

Bilateral netting can reduce the number of foreign exchange transactions among a MNC with N affiliates to


A) Bilateral netting can reduce the number of foreign exchange transactions among a MNC with N affiliates to A) . B) . C) . D) None of the above. .
B) Bilateral netting can reduce the number of foreign exchange transactions among a MNC with N affiliates to A) . B) . C) . D) None of the above. .
C) Bilateral netting can reduce the number of foreign exchange transactions among a MNC with N affiliates to A) . B) . C) . D) None of the above. .
D) None of the above.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Find the net cash flow in (out of) the German affiliate.


A) $55,000 in
B) $15,000 out
C) $0 in or out
D) $40,000 out
E) None of the above

F) All of the above
G) A) and D)

Correct Answer

verifed

verified

Using your results to the last question, use bilateral netting to simplify. Using your results to the last question, use bilateral netting to simplify.

Correct Answer

verifed

verified

Using your results to the last question, use multilateral netting to simplify. Using your results to the last question, use multilateral netting to simplify.

Correct Answer

verifed

verified

Notice that the $5 t...

View Answer

Which one of the following is a false statement when engaged in bilateral netting?


A) Total interaffiliate receipts will always equal total interaffiliate disbursements.
B) We can reduce the number of foreign exchange transactions among a MNC with N affiliates to Which one of the following is a false statement when engaged in bilateral netting? A) Total interaffiliate receipts will always equal total interaffiliate disbursements. B) We can reduce the number of foreign exchange transactions among a MNC with N affiliates to or less C) Each affiliate nets all its interaffiliate receipts against all its disbursements. It then transfers or receives the balance, respectively, if it is a net receiver or payer respectively. D) All of the above or less
C) Each affiliate nets all its interaffiliate receipts against all its disbursements. It then transfers or receives the balance, respectively, if it is a net receiver or payer respectively.
D) All of the above

E) None of the above
F) B) and C)

Correct Answer

verifed

verified

Which one of the following is a false statement when engaged in bilateral netting?


A) Total interaffiliate receipts will always equal total interaffiliate disbursements.
B) We can reduce the number of foreign exchange transactions among a MNC with N affiliates to Which one of the following is a false statement when engaged in bilateral netting? A) Total interaffiliate receipts will always equal total interaffiliate disbursements. B) We can reduce the number of foreign exchange transactions among a MNC with N affiliates to or less C) Each affiliate nets all its interaffiliate receipts against all its disbursements. It then transfers or receives the balance, respectively, if it is a net payer or receiver. D) All of the above or less
C) Each affiliate nets all its interaffiliate receipts against all its disbursements. It then transfers or receives the balance, respectively, if it is a net payer or receiver.
D) All of the above

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Showing 61 - 80 of 100

Related Exams

Exam 1

Globalization and the Multinational Firm

100 Questions

Exam 2

International Monetary System

100 Questions

Exam 3

Balance of Payments

100 Questions

Exam 4

Corporate Governance Around the World

100 Questions

Exam 5

The Market for Foreign Exchange

98 Questions

Exam 6

International Parity Relationships and Forecasting Foreign Exchange Rates

100 Questions

Exam 7

Futures and Options on Foreign Exchange

100 Questions

Exam 8

Management of Transaction Exposure

98 Questions

Exam 9

Management of Economic Exposure

100 Questions

Exam 10

Management of Translation Exposure

81 Questions

Exam 11

International Banking and Money Market

103 Questions

Exam 12

International Bond Market

100 Questions

Exam 13

International Equity Markets

100 Questions

Exam 14

Interest Rate and Currency Swaps

100 Questions

Exam 15

International Portfolio Investment

101 Questions

Exam 16

Foreign Direct Investment and Cross-Border Acquisitions

100 Questions

Exam 17

International Capital Structure and the Cost of Capital

100 Questions

Exam 18

International Capital Budgeting

102 Questions

Exam 20

International Trade Finance

100 Questions

Exam 21

International Tax Environment and Transfer Pricing

99 Questions

Show Answer