Chipper's Golf resort is in the process of purchasing rare Kauri wood from New Zealand to be made into an impressive mantle on the fireplace of its new clubhouse. Before disbursing payment to the New Zealand dealer, the director of the construction project is concerned about the timeliness of delivery as well as the quality of the slab of wood once it is delivered. As the representative of Chipper's bank, you suggest that the Golf resort sign a(n):

Question

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A letter of credit is a financial instrument that guarantees payment to the seller and protects the buyer against issues with delivery or quality. In this case, it would ensure that the New Zealand dealer is paid once the rare Kauri wood is delivered on time and meets the quality standards specified in the letter of credit. This is the most appropriate option for ensuring a smooth transaction between the two parties.

Chipper's Golf Resort Is in the Process of Purchasing Rare