Which of the Following Is Not True Regarding a Banker's

question 49

Multiple Choice

Which of the following is not true regarding a banker's acceptance?

• A)The exporter benefits because it does not have to worry about the credit risk of the importer.
• B)The importer benefits because it obtains greater access to foreign markets when purchasing supplies.
• C)The bank guaranteeing the draft earns a commission for creating an acceptance.
• D)It is a sight draft.
• E)All of the above are true.

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Definitions:

Net Operating Income

The profit generated from a company's operational activities, calculated as revenues minus the cost of goods sold and all operational expenses, excluding interest and taxes.

Common Fixed Expenses

Costs that remain constant regardless of the volume of goods produced or sold, including items like lease payments, wages, and coverage fees.

Break-Even

The point at which total costs equal total revenue, resulting in neither profit nor loss.

Sales Dollars

The total monetary amount received from selling goods or services before any deductions are made.