Answer:
Inflation and exchange rate movement affect my firm which is
private schools in following ways:
- If inflation increases or our domestic currency gets weaken the
cost of running the school and infrastructure and various services
will increase. This will lead to decrease in net profit that a
private school is generating. Hence, to counter balance this
usually school increases the monthly fees.
- Changing of fees or introducing one time payment is also costly
affair, because the notice needs to be propagated to every
stakeholder, plus the same change needs to be incorporated in
official website of the school as well.
- Inflation changes very often but at the same rate school fees
cannot be changed, so school needs to foresee how much fees need to
be increased so that revision can be done either after 6 months or
after a year.
- Regarding fees increase, there is some max-limit is set by
country as well above which it cannot be increased after that fees
are taken indirectly like project fee, extracurricular activities
organizing fee etc.
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