Problem: The biggest set of macroeconomic variables that companies need to worry about is the Gross Domestic Product , employment rate and interest and tariff rates. This is precisely because of the new administration in the United States. With President Trump putting majority of his focus on domestic production, it is estimated that employment in the US would rise but so will the prices of products. This is because the cost of making the products in the US is more expensive than it would be in the developing nations like India or China or any other Southeast Asian countries. Hence, this would affect the purchasing power of the citizens and will in turn affect the GDP of the nation. Financial managers will try to be aware of these new policies and most certainly keep an eye on import tariff rates. With the current president saying in one of his speeches that all goods (especially air conditioners) that are imported from Mexico will have to pay a 35% import tariff rate. These policies will most certainly concern financial managers as these would heavily affect their pricing strategy. I believe another important variable would be foreign relations. With even developing countries like India and China trying to make themselves heavily export oriented nations, it will be fascinating to see how these nations can maintain their business relationships in the future.
Certainly the concept of capital budgeting would play a massive role in determining the impact that these variables would have in businesses as well as in the personal life in the future. As we learned that capital budgeting is an important investment tool which can be used in planning an organizations future. Most certainly with an unpredictable future, it was important to learn important techniques like calculating NPV and IRR, that will certainly be helpful in making decisions regarding long term investments, both in my professional as well as personal life.
Question
Please provide additional suggestions based on that post for how the concepts and/or skills provided could be used in the real world.