Costs and Value of Credit/Activities

Unit 3.2- Costs and Value of Credit

Introduction | Assessment Factors | Summary | Resources | Activities | Assessment Go to Unit 3.1 | Unit 3.2 | Unit 3.3 | Unit 3.4 | Unit 3.5 Return to International Finance Module 3: Commerical Risk

Activity

Activity

You have received an order for US$750,000 from a new customer. The customer has requested open account payment terms of Net 90 Days on Invoice Date. Having no prior experience with this customer, you need to conduct a credit investigation before you extend payment terms. 1. Identify the cost of a credit report from three different agencies as listed in the resources. 2. Compare and contrast and the characteristics of the credit report and determine the best investment to make in order to decide on payment terms for your new customer. 3. Discuss the other information you might need to grant payment terms. To vary the activity, divide the class into groups or have each individual research the cost and characteristics of credit reports from different countries assuming the customer is based there.

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