24-11-2012, 01:53 PM
Multinational Financial Management
FINANCING FOREIGN TRADE.ppt (Size: 156 KB / Downloads: 132)
PAYMENT TERMS
Five Principal Means:
1. Cash in advance
2. Letter of Credit
3. Drafts
4. Consignment
5. Open Account
Cash in Advance
1. Minimal risk to exporter
2. Used where there is
a. Political unrest
b. Goods made to order
c. New unfamiliar customer
Advantages of an L/C to Exporter
a. eliminates credit risk
b. reduces default risk
c. payment certainty
d. prepayment risk protection
e. financing source