Which TWO of the Following Business Costs Are Directly Affected

question 3

Multiple Choice

Which TWO of the following business costs are directly affected by a rise in the interest rate? (Choose two.)

• A) The cost of procuring equity finance.
• B) The cost of complying with government regulations.
• C) The cost of borrowing from private lenders.
• D) The cost of accessing government subsidies.
• E) The cost of procuring intermediate goods.

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Definitions:

Debt Investments

Investments made in bonds or other debt instruments, where the investor lends money in exchange for interest payments.

Amortization

The allocation of the cost of an intangible asset to expense over its useful life in a systematic and rational manner.

Stock Investments

Purchases of shares in other companies, intended as a long-term investment or to exert control or influence over those companies.

Cash

Money in the form of coins or banknotes, especially that held by an organization or in bank accounts.