1. IntroductionMultinational corporations engage in foreign or international trade that involves the exchange of goods and services across national borders. Globalization has encouraged more companies to participate in trade internationally. To finance this exchange of goods and services, financial resources are needed and the choice of financing depends on the companies and the environment in which the exchange takes place.2. Literature Review Choices available to multinationals in international trade financing include cash advances, letters of credit, document collection, and account opening conditions (Shenkar and Luo, 2008, pp. 379). The decision on selecting any of the above payment methods must be informed by factors affecting both the exporter and importer of goods and services. The choice of selection will depend not only on the economic and environmental circumstances prevailing in the importer's country, but also on the negotiated method mutually agreed upon by both partners in international trade. Prepayment means the buyer pays for the product up front...