Which of the following are advantages of netting?
I.Avoiding transaction costs
II.Shifting profits to different subsidiaries
III.Avoiding taxes for the parent firm
IV.Increasing flexibility in the parent firm
A) I only
B) II only
C) I and IV
D) II, III, and IV

Question

Quizplus · Accepted Answer

Netting can help avoid transaction costs by consolidating multiple financial transactions into a single transaction, which reduces the number of fees and commissions that need to be paid. Netting can also increase flexibility for the parent firm by allowing it to more easily manage cash flows and liquidity. However, netting does not typically involve shifting profits to different subsidiaries or avoiding taxes for the parent firm.

Which of the Following Are Advantages of Netting