MBA 820 - Reflections on Module 2

Answer the following questions in your learning journal to stimulate your thinking. Your responses should demonstrate reflective thought.

What is the importance of interest rates to your organization?
My current organization is not affected by interest rates as much as other companies. AMP has great cash flow and operates with its use of cash. The company does not enter into many long-term debt situations. It uses short-term debt, which is probably used to keep their credit risk down, etc. AMP mainly enters into capital projects and expansion through use of their cash reserves and less through the use of long-term loans.

How do interest rates impact your ability to make purchases of durable goods and real estate?
Rising interest rates make it more difficult to enter into long-term projects or purchasing of real estate, especially for investment purposes. This will also increase the cost of car loans, etc, which will result in consumer spending dropping - leading to possible recession.