Q$6\mathrm{.}3($Algo$)$ Philly Air $[6\mathrm{.}2,6\mathrm{.}3]$

PhillyAir Inc. offers low cost air travel between Philadelphia and Atlantic City. Philly Air's invested capital is $$1,300,000,$ corresponding to the investment in the $2$ planes the company owns. Each of the $2$ planes can carry $45$ passengers. Each plane does $9$ daily trips from Philadelphia to Atlantic City and $9$ from Atlantic City to Philadelphia. The price is $$80$ for each one$-$way ticket. The current load factor is $60$ percent $($i$.$e$.,27$ seats are sold on the average flight$).$ The annual cost of operating the service and running the business is $$28,100,000($including all costs, such as labor, fuel, marketing. gate fees, landing fees, maintenance, etc.$).$ The company operates $365$ days a year.

a$.$ What is the current ROIC? $($Round

your answer to one decimal place.

b$.$ What is the minimum load factor at which the company breaks even? $($Round your answer to two decimal places$)$

c$.$what load factor would the company have to achieve so that it obtained a $10$ percentage$-$point increase in the ROIC $($e$.$g$.,$ an ROIC increasing from $5$ percent to $15$ percent$)?$ Round your answer to two decimal places

PhillyAir Inc. offers low cost air travel between Philadelphia and Atlantic City. Philly Air's invested capital is $$1,300,000,$ corresponding to the investment in the $2$ planes the company owns. Each of the $2$ planes can carry $45$ passengers. Each plane does $9$ daily trips from Philadelphia to Atlantic City and $9$ from Atlantic City to Philadelphia. The price is $$80$ for each one$-$way ticket. The current load factor is $60$ percent $($i$.$e$.,27$ seats are sold on the average flight$).$ The annual cost of operating the service and running the business is $$28,100,000($including all costs, such as labor, fuel, marketing, gate fees, landing fees, maintenance, etc.$).$ The company operates $365$ days a year.

a$.$ What is the current ROIC? $($Round your answer to one decimal place.$)$

Return on invested capital $($ROIC$)$ is

b$.$ What is the minimum load factor at which the company breaks even? $($Round your answer to two decimal places.$)$

$\backslash$table$[[$Minimum load factor is$,.]]$

c$.$ What load factor would the company have to achieve so that it obtained a $10$ percentage$-$point increase in the ROIC $($e$.$g$.,$ an ROIC increasing from $5$ percent to $15$ percent$)?($Round your answer to two decimal places.$)$

Load factor is