Suppose That a Sells $1 Million Monthly to Subsidiary B

Multiple Choice

Suppose that A sells $1 million monthly to subsidiary B and $1.5 monthly to subsidiary C,B sells $2.2 million monthly to A and $100,000 monthly to C,and C sells $600,000 monthly to A and $500,000 to B.Bilateral netting will reduce intercompany payment flows by ____,whereas multilateral netting will reduce these flows by _____.

A) $2.0 million,$1.7 million
B) $3.2 million,$5.2 million
C) $1.4 million,$3.3 million
D) 7 million,$2.7 million