- 8 Marks
FM – L2 – Q102 – Treasury management
PrimeCare Inc supplies medical goods to HealthBridge Ltd in Ghana, addressing credit and currency risks in a $3M contract.
Question
PrimeCare Inc, a company in the USA, has agreed a contract to supply medical supplies to HealthBridge Ltd, a large hospital group based in Ghana. The price of the contract is $3 million.
There is currently no existing relationship between the two companies and PrimeCare has no other customers in Ghana.
Required:
Explain how PrimeCare Inc can manage the credit risk and currency risk associated with this international transaction.
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