CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 90 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 90
Topic #: 1

[All CIMAPRA17-BA1-1 Questions]

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

APrices will have to increase due to increased inflationary pressures

BSales will increase as consumers have stable incomes in the short term.

CThe cost of financing projects through loans will increase

DThe cost of holding stock will reduce

Show Suggested Answer

Suggested Answer: C

by Sean at Jun 21, 2024, 07:22 AM

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Sylvia

5 months ago

Hold up, does option D mean the company gets to store their money in the fridge to save on electricity? Genius!

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Arthur

5 months ago

B? What kind of fantasy land is this question living in? Sales increase with stable incomes? Psh, yeah right.

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Dorothy

3 months ago

C) The cost of financing projects through loans will increase

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Tu

3 months ago

A) Prices will have to increase due to increased inflationary pressures

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Emilio

3 months ago

C) The cost of financing projects through loans will increase

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Darnell

4 months ago

B? What kind of fantasy land is this question living in? Sales increase with stable incomes? Psh, yeah right.

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Diane

4 months ago

C) The cost of financing projects through loans will increase

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Ashlyn

4 months ago

A) Prices will have to increase due to increased inflationary pressures

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Nichelle

5 months ago

I believe option A is incorrect, as prices may not necessarily have to increase due to inflation.

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German

5 months ago

But wouldn't option A also be affected by an interest rate rise?

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Javier

5 months ago

Hmm, I'd say A and C both apply. Prices would have to rise to offset the higher costs, and loans would become more expensive.

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Ashton

4 months ago

Lakeesha: It's a tough situation for businesses to navigate.

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Tamesha

4 months ago

So true, they have to deal with higher costs and less affordable financing.

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Lakeesha

5 months ago

Yeah, it's a double whammy for companies when interest rates rise.

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Mohammad

5 months ago

I think A and C make sense. Prices will go up and loans will cost more.

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Derick

5 months ago

I'm going to go with option C as well. Increased financing costs are the most obvious impact of rising interest rates.

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Rene

5 months ago

Yeah, higher financing costs can really eat into profits. It's a tough situation to navigate.

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Lenna

5 months ago

Option C is definitely the most direct impact of rising interest rates on a company.

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Dallas

5 months ago

I agree with Lizbeth, because higher interest rates mean higher loan costs.

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Lizbeth

6 months ago

I think the answer is C.

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Ora

6 months ago

Definitely C. When interest rates rise, the cost of borrowing money for projects will go up, plain and simple.

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Xuan

5 months ago

A) Prices will have to increase due to increased inflationary pressures

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Marylyn

5 months ago

That's true, higher interest rates mean higher borrowing costs.

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Nicholle

6 months ago

C) The cost of financing projects through loans will increase

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