Ch 18 - International Financial Management

Ch 18 - International Financial Management - CHAPTER 18...

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CHAPTER 18 INTERNATIONAL FINANCIAL MANAGEMENT FINANCIAL ISSUES IN INTERNATIONAL TRADE: Which currency to use for the transaction When and how to check credit Which form of payment to use How to arrange financing METHOD OF PAYMENT: Payment in advance Open account Documentary collection Letters of credit Credit cards Countertrade FORMS OF DRAFTS: Sight Draft: requires payment upon transfer of title to the goods from the exporter to the importer Time Draft: extends credit to the importer by requiring payment at some specified time o Date draft: specifies particular date DOCUMENTATION FOR LETTERS OF CREDIT: Export licenses Certificates of product origin Inspection certificates TYPES OF LETTERS OF CREDIT: Advised letter of credit Confirmed letter of credit Irrevocable letter of credit Revocable letter of credit USING A LETTER OF CREDIT: COUNTERTRADE: Occurs when a firm accepts something other than money as payment for its goods or services Forms o Barter o Counterpurchase (parallel barter) o Buy-back o Offset purchase
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PAYMENT METHODS FOR INTERNATIONAL TRADE: Method Timing Risks Availability of Financing Conditions for Use Payment Delivery Exporter Importer Payment in
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This note was uploaded on 04/18/2008 for the course MGCR 383 taught by Professor Karlmoore during the Winter '08 term at McGill.

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Ch 18 - International Financial Management - CHAPTER 18...

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