Interest rates can affect business decisions

Assignment Help Business Management
Reference no: EM132819825

Many managers do not understand the various ways that interest rates can affect business decisions. For example, if your company decided to build a plant with a 30-year life and short-term debt financing (renewed annually), the cost of the plant could skyrocket if interest rates were to return to their previous highs of 12% to 14%. On the other hand, locking into high, long-term rates could be very costly also with a long period when low short-term interest rates were to be available. As you can see, the ability to know your economic environment and its impact on projected interest rates can be crucial to making good financing decisions.

Reference no: EM132819825

Questions Cloud

Determining the alternatives internal production : At what quantity would alternatives Internal production 1 and Internal production 2 yield the same profit?
How much will she pay in federal income taxes annually : Starting next week she will receive a $40 per week raise. After the raise, how much will she pay in federal income taxes Annually
Find out degree of financial leverage at fifty percent rate : Find out Degree of Financial Leverage at 50% rate of tax. Bond selling of 100,000 with rate of interest 12.5%. There is no preferred stock in the structure
What is the probability that the project : The following table represents the set of activities required to complete project, along with their time estimates for PERT calculations.
Interest rates can affect business decisions : Many managers do not understand the various ways that interest rates can affect business decisions.
What is the minimum makespan for set of five jobs : An automobile detailing shop has the following jobs waiting to be processed. All jobs (cars requiring detailing) must first be cleaned, then waxed.
Provide journal entries necessary to account for application : Kosta Ltd has received applications for 4 million shares during July 2020. Provide journal entries necessary to account for the applications of Kos Ltd shares.
Determine the dollar value of ending inventory : Sales were 420 units at $25. Using the FIFO method, determine the dollar value of Ending Inventory for the month of May
Management information system : In your experience, have you found an effective decision making process useful in all situations? Explain why or why not.

Reviews

Write a Review

Business Management Questions & Answers

  Present value of growth opportunities for arn

What is the present value of growth opportunities for ARN? Round your answer to two decimal places.

  What is price that you should charge if demand elasticity

You are currently charging $10 for your product. What is the price that you should charge if demand elasticity is -3?

  Personality traits management style and leadership qualities

Describe the personality traits, management style, and leadership qualities that helped him or her lead the company to a successful implementation of new practices.

  What are the characteristics of a strong body paragraphs

What are the characteristics of a strong body paragraphs, and how do the details in the body paragraph relate to the topic sentence

  What is relationship among kirkpatricks levels of evaluation

What is relationship among Kirkpatrick's four levels of evaluation? Would you argue for examining all four levels, even if your boss suggested you should look only at the last one and, that if it improved, you would know that training had an impac..

  Organisational culture-impact on employees work performance

Discuss how an organisational culture can formed (formal/informal), the organisational structures in which organisational cultures can form

  Lawyer had provided ten hours of legal services

he oral agreement between Tom and Amy was binding on both Sub Corp. and Main Corp. Amy became dissatisfied with Lawyer's representation, discharged Lawyer and demanded the return of her $10,000 retainer. Lawyer refused on the ground that pursuant to ..

  Baselines and monitoring and controlling a project

Based on what you have read this week on project baselines and monitoring and controlling a project (LO5), discuss what the term contingencies mean? Should contingency costs be included in a project proposal or budget? Why or why not?

  Identify two components of a business plan

Identify two components of a business plan that would be the most challenging for you to accomplish as an aspiring entrepreneur.

  Critically evaluate the vrio framework

Critically evaluate the VRIO framework and discuss which other model or framework could be associated to VRIO to overcome its limitations.

  Crowdfunding platform kikstarter

In 2012, Marilyn started a technology company using the crowdfunding platform Kikstarter. She has been so successful that she is ready to go from a private

  Receptive to organization development

What indicators would you use to determine that the organisation's culture is receptive to organization development?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd