Impact Of Interest Rates On Capital Purchases Questioned

Falling interest rates are suppose to generate more investment in capital, but that's not always the case, finds a study from RHI Management Resources, a Menlo Park, Calif.-based consulting firm. A survey conducted by the company found that 48% of responding CFOs said interest rates have no impact on business expenditures, while 50% said prevailing rates are factored into their purchasing decisions. Of the 50% who consider interest rates, 14% said the rates have a "significant impact" on purchasing decisions while 36% said they have "somewhat of an impact." The survey was conducted by and independent research firm and included responses from 1,400 CFOs from a random sample of U.S. companies with more than 20 employees.

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