Financial and Legal Costs/Activities

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Unit 4.8-Financial and Legal Costs

Introduction | Bank Charges | Insurance Premiums | Export Credit Insurance | Legal Fees | Summary | Resources | Activities | Assessment Go to Unit 4.1 | Unit 4.2 | Unit 4.3 | Unit 4.4 | Unit 4.5 | Unit 4.6 | Unit 4.7 | Unit 4.8 | Unit 4.9 Return to Trade Finance Module 4: Payment Methods

Contents 1 Activity 1.1 Scenario A 1.2 Scenario B 1.3 Scenario C 1.4 Scenario D

[edit] Activity

Based on the available methods of payment for international transactions, identify the costs associated with each. Using the following scenarios, identify which methods of payment make sense to use and which do not make sense from cost perspective only:

[edit] Scenario A

Order Value - 2,000,000
Profit Margin – 40%
Currency - USDollars
Your role – Exporter

[edit] Scenario B

Order Value – 15,000
Profit Margin – 60%
Currency – Euro
Your role - Exporter

[edit] Scenario C

Order Value – 250,000
Profit Margin – 30%
Currency – Japanese Yen
Your role – Importer

[edit] Scenario D

Order Value – 75,000
Profit Margin – 50%
Currency – US Dollars
Your role - Importer