May Ling Chin has had poor success in collecting monies owed from clients in Hong Kong even though she understands that ins and outs of doing business with the Chinese there.In future arrangements she plans to pursue _____________ where,after offering the buyer a long-term financing deal,she will sell the account receivable to a Hong Kong bank and let them worry about collecting.She will not receive as much money as she would like but she will at least be assured of receiving a fair amount.

Question

Quizplus · Accepted Answer

Forfaiting is a financial arrangement where the seller (in this case, May Ling Chin) can sell its account receivables to a financial institution (in this case, a Hong Kong bank) at a discount in exchange for cash. The bank then takes over the responsibility of collecting the payment from the buyer, and May Ling Chin can receive cash upfront rather than waiting for the buyer to pay. This can help to mitigate the risk of non-payment and improve cash flow. Therefore, forfaiting is the best choice for May Ling Chin's situation.

May Ling Chin Has Had Poor Success in Collecting Monies