If inflation rate increases in what ways it will affect an engineering consultancy firm?
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inflation rate on Nov. 2010 was 3.7% but now on Nov. 2011 it was 4.8%. I just want to know if this inflation rate will be good for a company or it will serve as a threat.
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Answer:
It depends on 1. if it is anticipated or unanticipated inflation. 2. if the company has an inflation adjusted loan rate or fixed rate. 3. the elasticity of demand of the company's product,if it can raise price.
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