9. 1.56 Continental Airlines operates in and out of many countries. Country A has a low inflation rate of 3% per year while country B has a high rate of 30% per year. A $1 million fund is maintained in each country for emergency purchases to repair disabled aircraft.

(a) Use a formula to determine the purchasing power after 2, 4, and 5 years if the funds are not utilized.

(b) (Spreadsheet exercise) Use a spreadsheet to plot the diminishing purchasing power curves, if assigned by your instructor. (c)

With the dramatic effect of 30% inflation, if you were president of Continental Airlines, how would you manage this situation?Page 39