Aurore SA has floating-rate borrowings of 4,500,000 at the reporting date, unhedged. Management considers a rise in rates of 0.75 % reasonably possible for the next year (management's judgement, case data). Calculate the effect of this change on profit before tax, in absolute value (a rise in rates reduces profit); the tax effect is ignored.
- Unhedged floating-rate borrowings
- 4,500,000
- Reasonably possible rise in rates
- 0.75 %