Multilateral netting in global cash management is best described as ________.
A) establishing a safety net so companies don't run out of cash
B) coordinating cash inflows and outflows among subsidiaries
C) transferring currencies among subsidiaries to exhibit transparency
D) transferring funds in the absence of a good cash budget or loan arrangement

Question

Quizplus · Accepted Answer

Multilateral netting in global cash management involves coordinating cash inflows and outflows among subsidiaries to reduce the number and size of external transfers and achieve cost savings. It involves offsetting mutual inter-company payments to a net position, with only the difference being transferred externally. This enables efficient cash management and reduces currency conversion costs. Options A, C, and D are inaccurate descriptions of multilateral netting.

Multilateral Netting in Global Cash Management Is Best Described as ________