5 to 8 please
Nizwa Cement Company, one of the leading producers and exporters of cement in Oman, received an order from Khazak Construction Company for 10,000 tons of cement. Nizwa cement quoted a price of 1200 USD per ton to Khazak Construction Company. Both the companies have been dealing with each other in the past and now Khazak is asking Nizwa Cement for 90 days credit. The export manager of Nizwa Cement wants to use a Banker's Acceptance. Current annual interest rate on banker's acceptances is 10% The bankers for the two parties are: Oman National Bank for Nizwa Cement and Khazak Commercial Bank for Khazak Construction Company. Answer the following questions with reference to the above case: 1. What type of draft is used: time or sight 2. Who prepares the draft? 3. Which party accepts the draft? 4. How much money in USD) will Nizwa Cement receive - full amount or less ? 5. Which party will open an LC 6. Who will be the beneficiary 7. What is the role played by the money market investors in the above deal. 8. How much money will the money market investor pay? full amount or less ? What are the risks to the following parties in the above case: 9. Nizwa Cement Company 10. Khazak Construction Company 11. Oman National Bank 12. Khazak Commercial Bank Nizwa Cement Company, one of the leading producers and exporters of cement in Oman, received an order from Khazak Construction Company for 10,000 tons of cement. Nizwa cement quoted a price of 1200 USD per ton to Khazak Construction Company. Both the companies have been dealing with each other in the past and now Khazak is asking Nizwa Cement for 90 days credit. The export manager of Nizwa Cement wants to use a Banker's Acceptance. Current annual interest rate on banker's acceptances is 10% The bankers for the two parties are: Oman National Bank for Nizwa Cement and Khazak Commercial Bank for Khazak Construction Company. Answer the following questions with reference to the above case: 1. What type of draft is used: time or sight 2. Who prepares the draft? 3. Which party accepts the draft? 4. How much money in USD) will Nizwa Cement receive - full amount or less ? 5. Which party will open an LC 6. Who will be the beneficiary 7. What is the role played by the money market investors in the above deal. 8. How much money will the money market investor pay? full amount or less ? What are the risks to the following parties in the above case: 9. Nizwa Cement Company 10. Khazak Construction Company 11. Oman National Bank 12. Khazak Commercial Bank
