CZ Industries medium-term Export Prepayment Facility / prepared by professor F. John Mathis, Darin Narayana, visiting lecturer, and professor Paul G. Keat
This case is about pre-export finance for an exporter in a developing country, Brazil. The Prepayment Facility is arranged up to a pre-determined amount for a specified time period before the buyers are known so that the exporter knows as it receives orders it will be paid in advance to help cover the cost of production. The Prepayment Facility provides the exporter with greater certainty about the volume of sales. For example, if the size of output is important to achieve economies of scale or if the building of a sales force and the level of sales activity are significant costs then these factors can be better managed
Notes
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