advantages and disadvantages of M&A
1. Why is letter of credit the commonest method of payment in international trade?
EX1:
How to pay or be paid becomes a crucial choice as soon as you begin doing business across borders. When you do business internationally, there are ways of paying that you might never hear about when doing business in just one country. There are a lot of method of payment in intertraditional trade but the commonest method is letter of credit.
Letters of credit are the most common method of payment in international trade as they provide protection to both parties involved in the transaction. They are issued by the international department of a chartered bank, usually that of the exporter and state all the terms and conditions that the exporter must meet before collecting the specified amount. If the conditions are met, the bank promises to pay the exporter. Letters of credit specify the documentation needed for customs clearance as well as details of any other terms associated with the sale (e.g., packaging changes or translated literature).
A letter of credit may be revocable or irrevocable. Irrevocable letters of credit are preferable because they cannot be canceled unilaterally and therefore greatly reduce the risk of non-payment. The exporter can also ask the bank that will be transferring the funds, usually the exporter's own bank, to confirm the letter of credit. This means that the bank guarantees payment upon the fulfillment of the terms of the agreement by the exporter. This confirmation provides additional assurance that the exporter will be paid.
EX2:
Introduce:
With the development of international trade, many methods of payment in foreign trade appeared, such as open account, the letter of credit, bill of collection and advantage payment. Among them, L/C is the commonest way. It is because L/C has many advantages which other methods do not.
Body:
- Paragraph 1: L/C is one of the safest methods of payment. o It guarantees payment upon presentation of the
EX1:
How to pay or be paid becomes a crucial choice as soon as you begin doing business across borders. When you do business internationally, there are ways of paying that you might never hear about when doing business in just one country. There are a lot of method of payment in intertraditional trade but the commonest method is letter of credit.
Letters of credit are the most common method of payment in international trade as they provide protection to both parties involved in the transaction. They are issued by the international department of a chartered bank, usually that of the exporter and state all the terms and conditions that the exporter must meet before collecting the specified amount. If the conditions are met, the bank promises to pay the exporter. Letters of credit specify the documentation needed for customs clearance as well as details of any other terms associated with the sale (e.g., packaging changes or translated literature).
A letter of credit may be revocable or irrevocable. Irrevocable letters of credit are preferable because they cannot be canceled unilaterally and therefore greatly reduce the risk of non-payment. The exporter can also ask the bank that will be transferring the funds, usually the exporter's own bank, to confirm the letter of credit. This means that the bank guarantees payment upon the fulfillment of the terms of the agreement by the exporter. This confirmation provides additional assurance that the exporter will be paid.
EX2:
Introduce:
With the development of international trade, many methods of payment in foreign trade appeared, such as open account, the letter of credit, bill of collection and advantage payment. Among them, L/C is the commonest way. It is because L/C has many advantages which other methods do not.
Body:
- Paragraph 1: L/C is one of the safest methods of payment. o It guarantees payment upon presentation of the