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What Is a Banker's Acceptance? How Are They Initiated? Why

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Essay

What is a banker's acceptance? How are they initiated? Why are they desirable for the exporter?


Definitions:

Expected Sales

The projected amount of sales that a company anticipates to achieve within a specific period.

Average Collection Period

The average number of days it takes a company to receive payment after a sale has been made.

Operating Cycle

The period between the acquisition of inventory and the collection of receivable generated from sales, reflecting how long it takes for a business to convert its inventory into cash.

Cash Collections

The process of gathering and managing the cash received from customers or clients.

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