Hatfield Manufacturing wants to import an important machine from Sweden. However, the company's head of manufacturing is reluctant to spend the time required to provide the documentation required to obtain a letter of credit that the Swedish exporter insists on. You are the company's CFO. Which of the following would you use as an advantage of a letter of credit to convince the head of manufacturing?
A. The importer does not have to pay for the merchandise until the documents have arrived.
B. Obtaining pre-export financing becomes easier.
C. It helps the importer to get goods for a lower price.
D. It results in lower shipping costs.
E. The importer does not have to pay the third party a fee for facilitating the transaction.
Answer: A. The importer does not have to pay for the merchandise until the documents have arrived
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International Business
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