Flender/Flender Gear Units/Helical speed reduction gearbox H1
. 1. 6 The bank lending rate is defined as the rate at which the private sector borrows to meet

short and medium term financing needs. 7-1 1 1 1 1 1 Average 1 1 1 1 1 Average 1.0

9.8 6.7 9.9 9.5 6.5 8.4 8.8 5.9 8.2 8.4 5.0 9.3 8.3 4.9 9.6 9.0 5.8 4.0 2.0 1.2

2.8 2.2 1.5 2.7 3.1 1.7 3.3 2.0 -0.2 3.4 1.5 0.4 3.2 2.2 0.9 2.2 1.9 1.2 1.8 1.6

1.4 1.6 1.8 1.6 1.7 1.4 1.9 Inflation rate 8.9 7.4 8.7 5.8 7.5 5.1 6.1 2.9 6.0 3.1 7.4 4.9 9.7 1.0 1.1 1.3 1.5 1.6 1.8 1.4 1.5 9.6 9.3 9.5 1.3 8.9 1.8 1.5 1.0 1.7 4.6 5.7 3.5 4.7 6.6 5.0 5.2 5.8 3.4 1.9 1.2 3.5 3.1 3.0 2.5 4.4 4.2 3.4 producing nations. During, 1-8, bank lending rates for West Germany and Japan were, on average, below those of the United States. Bank lending rates in the United States were lower than those in Canada and in some European countries, including Italy, France, the United Kingdom, and Belgium. However, in order to compare the rates offered in different countries, the costs of capital should be adjusted for inflation. Inflation rates are also shown in table 7-7. The cost of capital available to the individual firm varies depending on many factors including the credit worthiness or risk associated with the borrower. The term of the loan affects the cost because long-term, fixed-rate debts is more expensive in the long run than short-term, floating-rate debt. However, .. firms generally choose long term debt to protect themselves from inflation risk whereas firms in Japan and West Germany, where inflation has been lower and less volatile, rely more heavily on short term debt During 1-8, the ratio of short term to long term debt was 9 percent in Japan, 8 percent in West Germany, and 2 percent in the United States. 5 The company' relationship with the lender can have an effect on the cost of capital. In the United States, the relationship between banks and industry is limited by law and regulation. In countries