Why Is Eximbank Financing Often Referred to as Financing of "Last

question 19

Multiple Choice

Why is Eximbank financing often referred to as financing of "last resort?"

• A) it will not provide financing unless the U.S. exporter is doing business in more than one country
• B) it will not provide financing unless private capital is unavailable
• C) fees are extremely high for guarantees and insurance
• D) the Eximbank authorizes loans for only the worst credit risks

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Definitions:

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion with the level of business activity or production volume, such as raw materials and direct labor costs.

Target Income

The desired profit level that a company aims to achieve within a specific period, often used in budgeting and financial planning.

Contribution Margin

The amount of revenue remaining after subtracting variable costs, used to cover fixed costs and generate profit.