To minimize the cost associated with misdirected funds between subsidiaries, many multinational companies have instituted a process called ____.

Question

Quizplus · Accepted Answer

Multilateral netting is a process where subsidiaries within a multinational company offset payments owed to each other, reducing the overall number of transactions and minimizing the cost associated with misdirected funds. This process helps to simplify and streamline international transactions within the company. Option A, multinational cash consolidation, refers to the centralized management of cash across subsidiaries, which may not be directly related to minimizing the cost associated with misdirected funds. Option C, unilateral netting, refers to the process where one subsidiary may offset payments owed to another subsidiary, which may not be as effective in minimizing costs compared to multilateral netting. Option D, cash restriction, does not necessarily address the issue of misdirected funds between subsidiaries.

To Minimize the Cost Associated with Misdirected Funds Between Subsidiaries