$1.$ You are working for a highly reputable wastewater treatment company in Canada that is looking to bid on a large public works project in China. However, the project requires a $$300,000$ USD bid$-$bond up front and a $$1$M USD performance bond upon contract signing.

a$.$ What is a $$bid$-$bond$?$

b$.$ What is a $$performance bond$?$

c$.$ What makes these requirements challenging for most SMEs?

$2.$ Answer the following questions in relation to Question $1$

Explain how a standby Letter of Credit could be used to address the bond requirements

Who is CCC and how can the organization assist Canadian Companies faced with bid and performance bond requirements?

What support can EDC offer to help in this scenario?

What is EDC $$Wrongful Call$$ Insurance and is it relevant in this scenario? Explain your answer.

e$.$ Given the following options, list them in order of preference $($with the most preferred means by which a company could meet these requirements at the top, and the least preferred means at the bottom$)$ and explain why you have listed them in that order.

$1.$ Cash with EDCs wrongful call insurance

$2.$ Standby L$/$C

$3.$ CCC as prime contractor $($assuming foreign govt responds to their request favorably$)$

$4.$ EDC

$3.$ The following questions relate to EDCs export financing for foreign buyers of Canadian goods.$$

a$)$ Explain how EDCs export financing works when using a loan:$$

a$)$ The parties involved$$

b$)$ The steps involved$$

c$)$ The benefits to the seller$$

d$)$ The benefits to the buyer

$$

b$)$ How does export financing $($via a loan$)$ differ from export financing $($via a lease$)?$

c$)$ How does EDC determine whether or not to offer foreign buyer financing using a lease or a loan?