Compendium III - Lines & Finance - Adv Acc v4.docx - CASE...

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CASE Maderas Peruanas SA Prepared by Prof. Daniel Casiano Maderas Peruanas is a Peruvian Company founded in 1968 by Mr. Giacomo Franchini dedicated to drying and processing wood into finished products. Maderas Peruanas’s products are sold locally but mainly exported to international markets like Europe, North America, and Asia. The varieties of tropical wood used for production includes species like Cumaru , Shihuahuaco , Capirona , among others. Among the finished products sold are: Stairs, Lumber and Moldings and Hardwood Floors Recently, Maderas Peruanas has received a purchase order from a buyer in Italy named WOOD IMPORT ASCHIERO SPA. The purchase order has the following details: Items : Wood Floors ( DECKS ) 35x35 Material : Cumaru Designs : According to catalog Quantity : 300 m2 Price : U.S. $ 250 FOB ( Incoterms 2000) per m2 Shipping : 1 shipment 300 m2 Terms of payment: T / T 75 days B / L Time of shipment: 45 days confirmed after P.O. confirmation. Additional information: For extraction of raw materials and wood processing, Maderas Peruanas invests about 30 % of the P.O. This whole process takes at least 45 days Maderas Peruanas has three properties in Peru: • A factory located on the Carretera Federico Basadre 11,250 km in the city of Pucallpa, Department of Ucayali. • A sales and exports office located at 1880 Colonial Avenue, Lima. • A branch and Showroom located at 255 Avenue Builders - La Molina. 1. What are the credit facilities to be required by Maderas Peruanas for this operation? Indicate the amount and term. Consider that the bank covers a maximum of 90 % of the total transaction. 2. Consider that the loan is offered by two banks at the following rates: BANK A: Annual effective rate in US Dollars 10.5% BANK B: Libor +950 bps Which one is the most convenient? Calculate interests to be paid for each option. 3. What condition would Maderas Peruanas consider in order to support its credit facilities with Banks? 4. What would be the total cost (interest + commissions) if Maderas Peruanas offers Sepymex to guarantee Pre Shipment? 5. Compendium of Cases III – Page 1 of 13
CASE MULTIPAPELES S.A.C. Prepared by Prof. Daniel Casiano The company MULTIPAPELES in its search for new suppliers found an excellent supplier in Germany named OVERSEAS TRADING GMBH. The value of the material to be imported is US 57,500 dollars in CFR terms. As agreed between the parties, payment is due 30 days from B/L with an avalized documentary collection. MULTIPAPELES sells its products after 90 days from the invoice date, so the credit terms offered by the supplier are not enough. According to the customs agent of the buyer, INTEGRAL LOGISTICS SRL, duties and taxes to be paid to release goods are approx. up to 20% of the total purchase order. 1. Indicate the credit facilities to be required by MULTIPAPELES SAC. Indicate amount, term and conditions.

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