Final answer:
Ex-Works (EXW) is a trade term indicating that the seller delivers goods at their premises, with the buyer taking all transport responsibilities and risks. It does not presuppose cash payment or transportation arrangements by the seller. The correct answer is that Ex-Works represents shipment transferred to the seller at factory. Option e is the correct answer.
Step-by-step explanation:
The term Ex-Works, often abbreviated as EXW, is an international trade term from the Incoterms (International Commercial Terms) which means that the seller makes the goods available at their premises, or at another named place (factory, warehouse, etc.).
The seller is not responsible for loading the goods on the buyer’s vehicle or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller’s premises to the desired destination. This term is often contrasted with other Incoterms like CIF (Cost, Insurance, and Freight), FOB (Free on Board), and others that define different levels of responsibility for the seller and buyer.
The concept of “cash and carry,” as it pertains to the Neutrality Act of 1935, allowed for nations at war to purchase materials from the US under the condition that they paid immediately in cash and took upon themselves the responsibility for transportation. This historical context addresses a different aspect of international commerce and should not be confused with Ex-Works. Ex-Works does not involve any conditions regarding immediate payment in cash or the arrangement of transport by the buyer, it purely defines the point at which the responsibility and risks of transport pass from seller to buyer.
The correct answer to the question would be: Ex-Works is a short way to say E. shipment transferred to seller at factory.