Skull Valley Airlines is a passenger airline. One of Skull Valley's primary expenses is the cost of aviation fuel. Of course, the cost of aviation fuel is heavily influenced by the worldwide price of oil which is known to fluctuate dramatically from year to year or even from month to month. It is February of Year 1. Skull Valley wishes to enter into a forward contract that will hedge the cost of the aviation fuel it will purchase in November of Year 1. Skull Valley plans to use 700,000 gallons of aviation fuel in November. On February 1, Skull Valley entered into a forward contract with Speculator A to purchase 700,000 gallons of aviation fuel from Speculator A for delivery on November 1 at a price of $5.50 per gallon As you know, derivative contracts, such as this forward contract, are rarely settled through actual delivery of the underlying item (700,000 gallons of aviation fuel in this example). Instead, a net cash payment is made from one of the parties in the contract to the other party. What net cash payment will be made on November 1 in each of the following circumstances:

(1) Price of aviation fuel is $4.50 per gallon?

(2) Price of aviation fuel is $5.00 per gallon?

(3) Price of aviation fuel is $5.50 per gallon?

(4) Price of aviation fuel is $6.00 per gallon?