Mathematics · Cash Management
A multinational company needs to manage the cash of its three Indian subsidiaries: Subsidiary 1: Balance +100 Crores INR Subsidiary 2: Balance +50 Crores INR Subsidiary 3: Balance -120 Crores INR (Overdraft) The bank charges 12% interest on overdrafts and pays 4% interest on current account surpluses. If the bank implements a 'Notional Pooling' CMS solution where it charges/pays interest on the 'Net Position', how much Net Annual Interest Expense/Income will the group save compared to keeping the accounts separate?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 18,40,00,000 INR
- 22,40,00,000 INR
- 39,60,00,000 INR✓
- 41,20,00,000 INR
Correct answer
9,60,00,000 INR
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