Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 words

Identifying Long Term Trends SLP - Essay Example have sufficient funds to fully invest there business in Canada, and as a result the financial managers may decide to source some funds from a financial institution. However, these funds will be associated with an interest rate set by the lender. During inflation period, the interest rates will tend to be higher, this will affect the amount of interest that will accrue to the loan borrowed (Mankiw, 2012). Financial managers of Fedex corporation should therefore, consider interest applicable before deciding where to source there funds. As an economic variable, the stock market affects FedEx Corporation, Canada’s expansion program. This is because the stock market index based on Canada’s stock exchange gives a prediction of the expected future value of stock prices. In case, there is a high value index FedEx Corporation should continue to carry out its expansion to Canada because the financial managers expect high profits as a result, of rapid economic growth accompanied b y low levels of unemployment. Financial managers need to also determine the rate of inflation in Canada before carrying out there investment. If inflation is high it then means that consumers prices will be high, and in turn will affect how they spend there money (Mankiw, 2012). If inflation is high FedEx Corporation will fix the prices of there services high, and as a result, consumers will not use the services because they cannot afford it. During inflation, it is extremely difficult for FedEx to determine how much income to generate, this is because it is difficult to determine the demand for there services at the higher prices (Mankiw, 2012). In addition, the financial managers of FedEx Corporation should focus on the trends of the real gross domestic product as it gives a measure of what the economy produces goods and services besides giving an accurate measure of changes in the price levels. In addition, the financial managers of FedEx Corporation should take into consideration the