Effects of Late or Non-payments/Assessment
1. The tenets (principles) of risk assessment rely on
- a. the customer for the most information.
- b. gathering as many facts on the customer as possible.
- c. your sales department for key data.
- d. having financial statements for all customers.
2. Recognizing the “risk/reward” of international credit means
- a. reducing outstanding receivables as much as possible.
- b. having flexible credit policies for international customers.
- c. knowing and apply the components of the “costs” of credit.
- d. getting the customer to agree on the “shortest” terms possible.
3. The “Eight C's" of credit risk evaluation for the global seller provide
- a. the sales department with necessary information.
- b. assistance to a buyer in improving the relationship with a seller.
- c. a simple checklist for the customers to complete.
- d. research on the customer and the international environment.
4. The “risks and rewards” element of international credit differs from domestic or “in-country” credit decisions because
- a. there is normally more profit available in international sales transactions.
- b. more factors impact both risk and reward in the international scene.
- c. there is normally more pressure from sales to sell internationally.
- d. financial statements on international customers are, by nature, more comprehensive than those of domestic customers.
(Correct answers: 1=b, 2=c, 3=d, 4=b.)