For a multinational corporation with many affiliates throughout the world,________ the management of the short-term cash balances of the affiliates provides significant savings to the firm.

Question

Quizplus · Accepted Answer

Centralizing the management of short-term cash balances of affiliates means consolidating all the cash balances into one central treasury function. This provides better visibility and control over cash management, allows for better cash forecasting, and helps avoid excess liquidity or shortfalls. As a result, the firm can achieve significant savings in terms of reduced borrowing costs, improved investment returns, and lower transaction costs.

For a Multinational Corporation with Many Affiliates Throughout the World,________