Abicycle tire company performed a web-based study of a popular tire retail price over time. the study indicated that price is set at $16.00 per tire, it was expected to increase to $19.00 over the next 5 years

a. determine the annual rate of inflation over 5 years to increase the price from $16.00 to $19.00.

b. determine the market interest rate that must be used in economic equivalence computations if inflation is considered and an 8% per year real interest rate is expected by this company.

(a) inflation rate will be 0.0349

(B) Nominal interest will be 8.0349 %

Explanation:

We have given final price of the bicycle F=$19

Initial price of the bicycle P=$16

(a) Time is given t = 5 years

We know that , here i is inflation rate

So inflation rate will be 0.0349

(b) We have given real interest = 8 %

We know that nominal interest rate = real interest rate + inflation rate = 8+0.0349 = 8.0349 %

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

d. automatic stabilizers.

explanation: