This company, located in Seattle, Washington, in the United States, is a distributor of engineering equipment and machine tools. The company receives an order from the Matens Company in Portugal for ten light earth-moving machines. Since the company does not normally carry this number in stock, the export manager, Mr Green, places an option on ten machines with the CPPC Manufacturing Company in Akron, Ohio, and requests a firm price quotation to be held in force for 90 days. The CPPC Company agrees to this and quotes a price of US$4500 ex warehouse, Akron, Ohio, for each machine.

Mr Green checks with his traffic manager and is told that railroad freight from Akron to Seattle for these machines will average approximately US$750 per machine. Other costs are as follows:

Questions

1. Calculate the C&F Lisbon price per machine and the CIF Lisbon price per machine.

2. At what point in time, or place, will RAP’s responsibilities for arrangements of the shipment end? When does RAP’s legal liability end and when does it acquire the right to payment?

3. How would your answer to question 2 change if the terms of sale were FOB vessel (FOB) or ex dock (DEQ)?

Transcribed Image Text:

Trucking and handling Export packing Shipping to pier Wharfage and handling Heavy lift charges: (applicable to items weighing over 5000 lb) Ocean freight: Seattle to Lisbon Marine insurance: shipped under deck shipped above deck US$ 5.00 per short ton 70.00 per machine 4.20 per short ton 3.30 per 40 cubic feet (cf) 17.00 per 2000 lb 142.50 per 2000 lb or 40 cubic feet, weight/measure 1.70 per $100 2.50 per $100