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CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 84 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 84
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

Which of the following describes the effect an interest rate rise may have on a company?

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Suggested Answer: C

by Ryan at Apr 11, 2024, 03:34 AM

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Wenona
10 days ago
Haha, yeah right. Stable incomes in the short term? Good one. With interest rates rising, I doubt consumers will be feeling too stable or eager to spend money.
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Chi
12 days ago
Hold up, what about option B? If consumers have stable incomes in the short term, that could actually increase sales for companies, right? Wouldn't that be a positive outcome?
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Elvera
13 days ago
Hmm, that's a good point. But I think option C is still the most direct and significant impact of an interest rate rise. Increased financing costs are harder to offset than just raising prices.
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Refugia
14 days ago
I'm not so sure. What about option A? Increased inflationary pressures could also force companies to raise their prices, which could have a significant impact on their operations and profitability.
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Kasandra
16 days ago
I agree with Sunshine. Option C is definitely the right answer here. Higher interest rates mean higher borrowing costs for companies, which can really hurt their bottom line and ability to invest in growth.
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Sunshine
18 days ago
Hmm, this question seems pretty straightforward. I think the correct answer is C - the cost of financing projects through loans will increase. An interest rate rise will make it more expensive for companies to borrow money, which will impact their ability to fund new projects and expansions.
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