Shaw Ltd has received a large order from its long-established and valued South African customer Norden Ply, who has always paid on time in the past. Shaw Ltd is concerned however that, as a consequence of political upheaval in the region, there is a small chance that Norden Pty may fail to pay within six months of the goods being shipped What is the most appropriate action for Shaw Ltd to take? A. Refuse to accept the order B. Approach a debt factor C. Take out export credit insurance D. Demand cash on delivery
Shaw Ltd has received a large order from its long-established and valued South African customer Norden Ply, who has always paid on time in the past. Shaw Ltd is concerned however that, as a consequence of political upheaval in the region, there is a small chance that Norden Pty may fail to pay within six months of the goods being shipped
What is the most appropriate action for Shaw Ltd to take?
A. Refuse to accept the order
B. Approach a debt factor
C. Take out export credit insurance
D. Demand cash on delivery
Solution:-
When goods are sold to a person outside the country, it is known as export.
When goods are exported, the exporter is afraid of his payment which is receivable from the importer of the goods. To hedge himself against this risk, he has various options available.
Step by step
Solved in 2 steps
