Which of the Following Is a Method of Export/import Financing

question 67

Multiple Choice

Which of the following is a method of export/import financing in which the importer's bank issues a document stating that the bank will pay the exporter when the exporter fulfills the terms of the document?

• A) sight draft
• B) bill of lading
• C) letter of credit
• D) bill of exchange

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Definitions:

Contribution Margin Ratio

The percentage of sales revenue that exceeds variable costs, indicating the portion of sales available to cover fixed costs and generate profit.

Fixed Costs

Expenses that do not fluctuate with changes in production level or sales volume, such as lease payments, salaries, and insurance.

Operating Leverage

A financial concept that measures the extent to which a firm can increase operating income by increasing revenue, highlighting the impact of fixed versus variable costs.

Break-even Point

The point at which total costs equal total revenue, meaning the business makes neither a profit nor a loss.