Exam 19: Managing Net Working Capital

If the cash a firm invests in net working capital does not earn the weighted average cost of capital,it should be ________.

What are the guidelines to use transfer pricing to shift income around the world?

Using a centralized cash management system results in a decreased ________ cash demand.

To avoid paying the higher ad valorem tariff to a foreign government,a multinational could set the transfer price for its goods entering the country for sale to an affiliate as ________ as possible.

When the parent lends to an affiliate in order to circumvent blocked fund policies of governments in affiliate countries,a financial intermediary is often used such as a(n)________.

One technique a multinational may use to avoid the blocked fund strategy of a foreign nation is for the parent to lend funds to the affiliate.The loan is known as a ________ loan.

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.

Suppose ABC International Company's Canadian subsidiary sells 1,300 trucks monthly to the French affiliate at a transfer price of $27,000 per truck.The Canadian and French marginal tax rates on corporate income are 45% and 50%,respectively.Assume the transfer price of the trucks can be set at any level between $25,000 and $30,000.Explain the transfer price you will set in order to minimize the total taxes paid by the Company.

The prices a multinational affiliate may charge another affiliate when selling inputs or services to them are known as ________.

What are the determinants of leading payments between related international affiliates?

________ refers to the stock of current assets held by a firm at any point in time.

When using the cash management methods of lagging or leading payments,the basic idea is to move funds from