Question

Sharon works for a cereal manufacturing company. Her company recently built a manufacturing facility in Canada and agreed to take 15 percent of the cereal produced as partial payment over a ten-year period. What form of countertrade is her company pursuing?a.offsetb.barterc.countertraded.buyback

Answer 1

Answer:

d. buyback

Explanation:

The scenario that is being described is a form of countertrade known as buyback. There are two reasons why this usually happens. The first is that the manufacturing company has limited access to liquid funds in the country which they are currently located and the goods provide better value. The second circumstance would be that they believe that the product being produced will increase in value and their profits will increase by holding the product as opposed to liquid funds.