Cash management in an international firm is comparatively a more complex task. This is because the intra-firm transfer of funds is a common feature. The tax rate and interest rate vary between countries. Exchange rate is subject to frequent changes. Political, legal, economic and other features of the environment in different host countries are not fully known to the parent unit. And above all, the host government often places restrictions on the transfer of funds across the national boundaries.

Against this background, it is worthwhile to explain, first, the intra-firm transfer of funds in the face of restrictions; and second, the investment of surplus cash at a particular international location.

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