Assignment:
If the Fed decides to raise interest rates next year, what effect would rising rates have upon the following: (1) Consumer financing for big-ticket items such as autos and homes; (2) the present and future values of annuities; (3) the NPV calculation (4) the WACC (5) corporate earnings ?
Please illustrate with relevant financial numbers. For example,one approach you might adopt is to contrast NPV calculation against a new calculation performed with a higher interest rate. Cite the numeric effect upon the NPV, and then explain its rationale and its significance. Provide numeric illustration for each of the five topic sections.