Question 3 a) Describe the principle of a letter of credit (LC) and discuss the FOUR phases involved in generation and execution of LC. b) Explain how credit financing can be attached to LC, and when firms would consider the LC financing

Q: Which of these transactions would be part of the financing section?

A: Answer -    Financing Section of Cashflow are cash transactions related to the business raising…

Q: What are industry benchmarks, and why are they used in the credit evaluation process?

A: The answer for the question on the industry benchmarks used in the credit evaluation process is…

Q: List and explain the differences between a self managed credit plan and a contracted credit plan.

A: A credit is a type of loan taken by individuals or corporations in which the borrowers borrow an…

Q: 44. Which statement correctly identifies the loan type with its function? O (a) FHA guarantees loans…

A: A loan is defined as the financial term, where the funds or money is given to some other party in…

Q: According to the Conceptual framework, part of the reason for production of financial statements is…

A: Advantages of Conceptual Framework: Consistency and Comparability: The conceptual framework…

Q: Identify 3 uses of financial data and how they impact reimbursement,   planning, and forecasting.

A: The company would be considering the evaluation process first for the purpose of accurate…

Q: Which are the fundamental relationships to know in any loan refinancing decision include at least…

A: Loan refinancing decision involves replacement of an existing debt with a new debt. The intention of…

Q: QUESTION 1 Which if the following is not true of the 5Cs in evaluating credit quality…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: Securitization is the financial practice of pooling various types of contractual debt, such as…

A: Securitization is a process in which a financial institution or any company merges its liquid assets…

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.