Question
Thank you for your contribution and for presenting an in-depth look of the Bank of Canada's Monetary Policy. This made me question the consequences of
Thank you for your contribution and for presenting an in-depth look of the Bank of Canada's Monetary Policy. This made me question the consequences of elevated borrowing expenses and inflationary forces for enterprises seeking to make short-term investments. Referring to the report, although the medium-term forecast appears favorable, the current elevated interest rates provide a substantial obstacle. For example, a manufacturing firm that intends to grow may encounter increased initial funding expenses, which might affect the company's decision-making process. This situation brings to mind a company I previously worked for, which successfully weathered comparable economic situations by prioritizing projects that offered faster returns in order to counterbalance the increased costs of borrowing. However, what do you think companies should do with their short-term business projects now that the economy is expected to get better by 2025?
REF:
Bank of Canada. (2024, January 24).Monetary policy report - January 2024. RetrievedFebruary5, 2024, fromhttps://www.bankofcanada.ca/2024/01/mpr-2024-01-24/.
Ross, S. A., Westerfield, R. W., Jordan, B. D., Pandes, J. A., & Holloway, T. (2022). Fundamentals of corporate finance (11th Canadian ed.). McGraw-Hill Ryerson.
Please provide a brief and comprehensive response with IN-TEXT Citations. Thanks!
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