Scenario 3-2. Terry's Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry's business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry's cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry's good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services.
-In Scenario 3-2, an increase in interest rates seems very likely in the future. This will severely affect Terry's cash flow problems. This is an example of a threat from which of the following environments?

Question

Quizplus · Accepted Answer

An increase in interest rates directly impacts the economic environment by making borrowing more expensive, which can exacerbate cash flow problems for businesses like Terry's that rely on capital investments to stay current with technological advances.