CashManagement(國際財務管理,英文版)

1、INTERNATIONALFINANCIALMANAGEMENTEUN / RESNICKSecond Edition18Chapter EighteenMultinational Cash ManagementChapter Objective:This chapter discusses various issues associated with multinational cash management.Chapter OutlineThe Management of Multinational Cash BalancesCash Management Systems in Pract

2、iceTransfer Pricing & Related IssuesBlocked Funds1The Management of International Cash BalancesThe size of cash balances The currency denominationWhere these cash balances are located2The Size of Cash BalancesThe optimal size of the firms cash balances depend upon:The cost of keeping “too much” cash

3、 on hand. i.e. the opportunity costs of holding cashThe cost of not keeping enough cash on hand.i.e. the trading costs associated with having too little cashThe variability of cash flows.3Choice of CurrencyBy maintaining cash balances in a particular currency, the MNC is essentially speculating (or

4、hedging?) in that currency.4Where Cash Balances are Located.Should the firm have centralized cash management in the home country?Or should the firm let each affiliate handle it locally?Where are borrowing costs lowest and investment returns highest?5Cash Management Systems in PracticeMultilateral Ne

5、tting Is an efficient and cost-effective mechanism for settling interaffiliate foreign exchange transactions.Not all countries allow MNCs to net paymentsBy limiting netting, more unnecessary foreign exchange transactions flow through the local banking system.6Multilateral NettingConsider a U.S. MNC

6、with three subsidiaries and the following foreign exchange transactions:$10$35$40$30$20$25 $60$40$10$30$20$307Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$10$35$40$30$20$25 $60$40$10$30$20$308Multilateral NettingBilateral Netting would reduc

7、e the number of foreign exchange transactions by half:$10$35$40$30$25 $60$40$10$10$20$309Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$10$35$40$30$25 $60$40$10$10$20$3010Multilateral NettingBilateral Netting would reduce the number of foreign

8、 exchange transactions by half:$10$35$10$25 $60$40$10$10$20$3011Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$10$35$10$25 $60$40$10$10$20$3012Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by ha

9、lf:$10$35$10$25 $60$40$10$10$1013Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$10$35$10$25 $60$40$10$10$1014Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$25$10$25 $60$40$10$10$1015Mult

10、ilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$25$10$25 $60$40$10$10$1016Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$25$10$25 $20$10$10$1017Multilateral NettingBilateral Netting would red

11、uce the number of foreign exchange transactions by half:$25$10$25 $20$10$10$1018Multilateral NettingBilateral Netting would reduce the number of foreign exchange transactions by half:$25$10$15 $20$10$1019Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$25$10$

12、15 $20$10$1020Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$15$10$15 $20$10$10$1021Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$15$10$15 $20$10$1022Multilateral NettingConsider simplifying the bilateral netting

13、with multilateral netting:$15$10$15 $20$10$1023Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$15$10$15 $30$1024Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$15$10$15 $30$1025Multilateral NettingConsider simplifyin

14、g the bilateral netting with multilateral netting:$15$10$15 $30$1026Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$10$15 $30$1027Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$10$15 $30$1028Multilateral NettingCons

15、ider simplifying the bilateral netting with multilateral netting:$10$15 $30$1029Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$10$15 $3030Multilateral NettingConsider simplifying the bilateral netting with multilateral netting:$10$15 $3031Multilateral Netti

16、ngConsider simplifying the bilateral netting with multilateral netting:$15 $4032Multilateral NettingClearly, multilateral netting can simplify things greatly. $15 $4033Multilateral NettingCompare this:$10$35$40$30$20$25 $60$40$10$30$20$3034Multilateral NettingWith this:$15 $4035Transfer Pricing & Re

17、lated IssuesThe Transfer Price is the price that for accounting purposes, is assigned to goods and services flowing from one division of a firm to another division.Controversial for a domestic firmConsider the example of a firm that has one division that mills lumber and another that makes furniture

18、. The transfer price of the lumber is a political as well as economic and accounting issue.36Transfer Pricing & Related IssuesFor MNC, there exists the added complications of: Differences in tax rates.Import duties and quotas.Exchange rate restrictions on the part of the host country.37Blocked FundsA form of political risk is the