Question 3 (20%) The APP Group is a multinational group of companies. Today is 1 Apr. The treasury manager at NTT Co, one of APP Group's subsidiaries based in Europe, has just received notification from the group's head ofce that it intends to introduce a system of netting to settle balances owed within the group every three months. Previously inter-group indebtedness was settled between the two companies concerned. The predicted balances owing to, and owed by, the group companies at the end of June are as follows: Owed by (AP) Owed to (AR) Local currency(m) A (us) H (South Africa) US$12.00 H (South Africa) M (Europe) A (us) M (Europe) SAR42.00 The predicted exchange rates, used in the calculations of the balances to be settled, are 7 J Page 5 as follows: US$ SA R 1US$= 1.0000 10.7527 0.7353 1SAR= 0.0930 1.0000 0.0686 1= 1.3600 14.5773 1.0000 Settlement will be made in dollars, the currency of APP Group, the parent company. Settlement will be made in the order that the company owing the largest net amount in dollars will rst settle with the company owed the smallest net amount in dollars. Note: SAR is South African Rand, US$ is United States dollar and is euro. Required (a) Calculate the inter-group transfers which are forecast to take place. (b) Discuss the advantages of multilateral netting for multinational group of companies (20 marks) r