What is the expected after-tax dollar cost of borrowing pesos? Management of the Short-Term Investment Portfolio A major task of international cash management is to determine the levels and currency denominations of the multinational group's investment in cash balances and money market instruments.
If balances are held in interest bearing assets in; a country which has a withholding tax on non-resident interest income, and the tax rate exceeds the parent's home country tax rate, the parent cannot get full credit for the foreign tax paid and such a location may therefore become unattractive for holding funds.
Such small differentials can easily be offset by foreign exchange transaction costs. The author however has revealed a huge potential in the emerging market in India and China.
Successful management of an MNC's required cash balances and of any excess funds generated by the firm and its affiliates depends largely on the astute selection of appropriate short-term money market instruments. These projections should take into account the effects of inflation and anticipated currency changes on future cash flows.
Where knowledge management maturity is high, there the firms are realizing handsome profits and significant increase in growth.
This Rs. Availability of investment vehicles and their liquidity is another important factor. What is the cost of the dollar loan to Ford?
Globally operating banks provide treasury workstations to their larger customers that enable them to gather real-time information about company cash-balances worldwide and permit them to initiate transactions online Shapiro,p.