Case study on Trade Finance Company ABC ltd is a 15m turnover company supplying IT equipment...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Case study on Trade Finance Company ABC ltd is a 15m turnover company supplying IT equipment and services to domestic businesses in Ireland. The company has gradually has gradually grown through excellent service competitive pricing and generally promoted itself in industry magazines and trade shows. Typical sale values have been in the region of 50k to 100k and gross sales margin has been in the region of 10-15%. An unsolicited approach has been made by a Russian buyer that attended a Trade show requesting detailed specifications of the services and potential costs. Interestingly the buyer is looking to install and pay for a number of systems in a number of its stores in Russia and is looking at a potential order of 600k which would represent the largest single order supplied by ABC Ltd. It would also enable entrance into a significant emerging market. Initial contact with the company has confirmed they are a substantial operation in Russia. However, one unexpected twist is that they wish to make 90% of the contract payment at 6 months after the final installation date. ABC Ltd have assessed it would take 3 months to install the equipment from receipt of order. This would mean that 90% of the 600k payment due would be received 9 months from receipt of order date. The remaining 10% will be paid in advance by the Russian buyer at the time of order. ABC Ltd has not previously exported and has no previous experience of working overseas, however, given the size of the potential order (and the possibility of achieving increased margin in a less competitive overseas market) would like to quote for the business. Case study on Trade Finance Company ABC ltd is a 15m turnover company supplying IT equipment and services to domestic businesses in Ireland. The company has gradually has gradually grown through excellent service competitive pricing and generally promoted itself in industry magazines and trade shows. Typical sale values have been in the region of 50k to 100k and gross sales margin has been in the region of 10-15%. An unsolicited approach has been made by a Russian buyer that attended a Trade show requesting detailed specifications of the services and potential costs. Interestingly the buyer is looking to install and pay for a number of systems in a number of its stores in Russia and is looking at a potential order of 600k which would represent the largest single order supplied by ABC Ltd. It would also enable entrance into a significant emerging market. Initial contact with the company has confirmed they are a substantial operation in Russia. However, one unexpected twist is that they wish to make 90% of the contract payment at 6 months after the final installation date. ABC Ltd have assessed it would take 3 months to install the equipment from receipt of order. This would mean that 90% of the 600k payment due would be received 9 months from receipt of order date. The remaining 10% will be paid in advance by the Russian buyer at the time of order. ABC Ltd has not previously exported and has no previous experience of working overseas, however, given the size of the potential order (and the possibility of achieving increased margin in a less competitive overseas market) would like to quote for the business.
Expert Answer:
Posted Date:
Students also viewed these general management questions
-
Describe and sketch the surface. 16x + 16y -9z = 0
-
What is the consolidated total of non-controlling interest appearing on the balance sheet? a. $85,500. b. $83,100. c. $87,000. d. $70,500. Use the following data for problem On January 1, Jarel...
-
Kam Company purchased a machine on January 2, 2013, for $20,000. The machine had an expected life of 8 years and a residual value of $300. The double-declining-balance method of depreciation is used....
-
Using the Double-Declining Balance Method The Peete Company purchased an office building for \(\$ 4,500,000\). The building had an estimated useful life of 25 years and an expected salvage value of...
-
River Co. began the accounting period with a $132,000 debit balance in its Accounts Receivable account. During the accounting period, River Co. earned revenue on account of $180,000. The ending...
-
12-23. A study was performed on wear of a bearing and its relationship to x = oil viscosity and x2 = load. The following data were obtained. y x X2 293 1.6 851 230 15.5 816 172 22.0 1058 91 43.0 1201...
-
Suppose you own a gas station. The daily demand for gasoline is 1,750 gallons per day. You purchase gasoline from your supplier @ $2.50 per gallon. Assume 360 days a year. Inventory carrying cost per...
-
Hobbs, the number 1 small domestic appliance brand in the UK, is willing to expand its plant. According to its manager's estimations, the new building will cost 7 million ponds and will produce...
-
Your uncle has a job that paid him the following year-end cash bonuses shown in the table below. Since he was a finance major in college, he invested all the bonuses he received in a stock mutual...
-
Drug 4 mg I every 3 hours prn pain. Supplied as 10mg/10 ml. Calculate mL per dose?
-
Chrome File Edit View History Bookmarks Profiles Tab Window Help MT217 Finance O PG Campus =Quiz: Unit 6 Lab Quiz X PG Campus G Sir W. Arthur Lewi... *FREE Digital Down... Christopher William X $ Do...
-
How to Build a demand table utilizing a generalized function. The demand generalization function for a product is as follows: Qd=200-10p-8M-10PR 1. Simplify the function when M-100 and PR=200 2....
-
Zoey uses normal costing with applied Material Overhead for their landscaping business. They did well at budgeting and estimating their costs throughout the year, however, they over applied their...
-
One study found that the elderly who do not have children dissave at about the same rate as the elderly who do have children. What might this finding imply about the reason the elderly do not dissave...
Study smarter with the SolutionInn App