Southwest Blue Airways provides air transportation services between Seattle and San Diego

Southwest Blue Airways provides air transportation services between Seattle and San Diego. A single Seattle to San Diego round-trip flight has the following operating statistics:

Fuel $7000
Flight Crew Salaries $5400
Airplane depriciation $2600
Variable cost per business class ticket $ 50
Variable cost pereconomy class ticket $ 40
Round trip ticket business class $ 550
Round trip ticket economy class $ 290

It is assumed that the fuel, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round-trip flight.

a. Compute the break-even number of seats sold on a single round-trip flight for the overall product. Assume that the overall product is 20% business class and 80% economy class tickets.
b. How many business class and economy class seats would be sold at the break-even point?

Click here for the solution: Southwest Blue Airways provides air transportation services between Seattle and San Diego

Sam Strother and Shawna Tibbs are senior vice presidents of the Mutual of Seattle

Sam Strother and Shawna Tibbs are senior vice presidents of the Mutual of Seattle. They are co-directors of the company’s pension fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs being responsible for equity investments. A major new client, the Northwestern Municipal League, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and Strother and Tibbs, who will make the actual presentation, have asked you to help them.

To illustrate the common stock valuation process, Strother and Tibbs have asked you to analyze the Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are to answer the following questions.

a. Describe briefly the legal rights and privileges of common stockholders.

AND SO ON

p. Temp Force recently issued preferred stock. It pays an annual dividend of $5, and the issue price was $50 per share. What is the expected return to an investor on this preferred stock?

Click here for the solution: Sam Strother and Shawna Tibbs are senior vice presidents of the Mutual of Seattle