1. Your airline has 3,000,000 in current assets and 1,500,000 in current liabilities. What is the current ratio?

2. You just received 10 new airplanes each equipped with three flight management systems (FMS). The manufacturer has guaranteed a mean time between removal (MTBR) of 30,000 FMS unit hours. Each aircraft has a daily utilization of 10 hours. When will the first FMS replacement be expected?

3. Big Dog Aviation wants to have enough FMS units at each of their five maintenance bases so that there will always be an operable FMS available. Each FMS costs $150,000. If they pay cash for the five FMS units, what will be the new current ratio?

4. In the problem above, how would you describe the effect of the new current ratio on the strength of the company?

5. Big Dog Aviation is using a new weather radar display that has an MTBR of 30,000 hours. Each aircraft requires two displays. After using it in 10 airplanes across the fleet over the last 5 years, their experience is a mean time between unscheduled removal (MTBUR) of 24,000 unit hours. How many radar displays will the company need if they want at least two replacement units available per month at each of their five locations to cover for an average daily flight time of 12 hours for each of their 100 airplanes?