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General Aviation Marketing And Management 1st Edition Bruce D. Wells, Alexander T.; Chadbourne - Solutions
The Aircraft Registration Branch of the FAA is located ina. Atlantic City, New Jersey.c. Oklahoma City, Oklahoma.b. Wichita, Kansas.d. Washington, District of Columbia.
Generally, the most expensive way for an aircraft dealer to acquire aircraft isa. floor planning.c. securing an installment loan.b. paying cash.d. manufacturer financing.
Charging interest only on the outstanding balance of the loan is referred to asa. installment purchasing.c. add-on interest.b. simple interest.d. floor planning.
Under a floor planning arrangement the financial institution willa. only charge interest on the outstanding balance of the loan.b. use an add-on interest method.c. provide the dealer with short-term financing at moderate interest rates.d. only charge interest while the aircraft is being flown.
The pricing technique traditionally used in aircraft sales isa. markup pricing.c. profit margin.b. competitive pricing.d. demand potential.
The following formula is used to determine the retail selling price of an aircraft.a. costc. cost markup % 1 00% - markup %b. costd. markup %markup % + 100% 100% - cost
If an aircraft dealer established a retail selling price of $130,000 for a used aircraft with a markup of 35 percent, the cost of the aircraft must have been approximatelya. $96,300.c. $78,200.^b. $84,500.d. none of these.
Which of the following is not an advantage of leasing?a. conservation of working capitalb. easier to upgrade equipment preservation of credit lines Jowest cost
Under which of the following types of leases could the lessee purchase the aircraft for $1.00 or nominal amount at the end of the term?a. wet leaseb. dry leasec. capital leased. operating lease
Chartering aircraft is particularly attractive for a firm whicha. uses aircraft infrequently.b. needs a special purpose aircraft.c. is considering purchasing an aircraft.d. all of these.
Contract flight service isa. quite different from chartering aircraft.b. very attractive for firms using aircraft more than 200 hours a year.c. used by companies needing to supplement their own aircraft.d. only done on an hourly basis.
in 1993, the average age of single-engine piston-powered aircraft in the U.S. fleet was years old.over 25c. just under 15b. just under 20d. over 30
Aircraft management firms are particularly attractive fora. operators with a large fleet of aircraft.b. operators with one or two aircraft.c. operators who fly in excess of 500 hours per year.d. charter operators.
Aircraft management firms can provide all of the following services excepta. timesharing agreements.b. insurance.^cn chartering a customer's aircraft,/fd.jno exceptions, all of the above can be provided.
Finance charges on aircraft loans depend upon all of the following factors excepta. length of the loan.b. amount of the down payment.c. the company's experience in operating aircraft.d. amount of the loan.
Which of the following statements concerning leasing is not correct?a. Should the airplane have a residual value higher than the amount used to determine the lease payments, the lessor would receive this gain as owner, not the lessee.b. An improperly structured lease could be determined to be a
A corporate aircraft operator might charter aircrafta. to supplement its airlift capability.b. because it is less expensive than ownership if estimated annual flying hours exceed 500.c. because it is less costly than using the airlines.d. all of the above.
All of the following are major operational factors to be considered in evaluating a charter operator excepta. geographical area of operations.b. flight crew knowledge of the operations manual.c. pilot qualifications and records.d. pilot training and turnover.
Companies will often seek outside assistance when considering the acquisition of business aircraft.T F
Companies that own or lease aircraft would never need to charter. T F
Generally one aircraft, if it is selected correctly, can meet 90 percent of a company's air transportation needs.T F
The used aircraft market has experienced the same downturn in activity as the new aircraft market.T F
A used aircraft is similar to a used automobile in that an individual or business could buy a definite"lemon."T F
There is a definite correlation between maintenance cost and systems complexity.T F
A new aircraft warranty covers the life of an aircraft so there is really no advantage in this regard in purchasing a new aircraft versus a used one.T F
It is possible to get a fairly good picture of a used airplane's current condition by studying the records of its usage, maintenance, and repair.T F
Two or more companies jointly purchasing an aircraft is a very effective way of increasing utilization with very few disadvantages.T F
Very few financial institutions are engaged in corporate aircraft loans because of the specialized nature of the business. T F
The down payment for used aircraft is the same as for new aircraft. T F
The longer the term of an aircraft loan, the lower the interest rate. T F
Most used aircraft are sold directly by the owner. T F
The principal buyers of used aircraft today are end users—those who will actually operate the aircraft. T F
The Aircraft Bluebook assists owners, brokers, and dealers in establishing current market value of used aircraft.T F
Airworthiness certificates are used to notify aircraft owners of unsafe conditions about their aircraft.T F
Most aircraft dealers buy the aircraft for as little as possible, put as little money as possible into the clean-up phase, and then try to sell the airplane at the highest price possible.T F
A sales agreement always identifies the specific airplane by "N" number.T F
A Certificate of Aircraft Registration must be secured from the FAA upon purchasing a used aircraft.T F
Aircraft dealers can obtain installment loans for the purchase of aircraft from the manufacturers' own finance companies.T F
Floor planning is the preferred method of financing dealer aircraft inventory T F
If a used aircraft cost the dealer $60,000 and markup percentage was estimated to be 40 percent, the retail price would be $84,000. T F
Jnder the wet lease, the lessor only provides the aircraft and fuel.T F
Conservation of working capital is a big advantage of leasing aircraft.T F
Under an operating lease, the lessor places an estimated value on the aircraft at the termination of the contract.T F
Financing is apt to be more liberal on a used airplane, with lower interest rates because of the operating history.T F
One disadvantage for an operator using an aircraft management firm is the lack of opportunity to charter its aircraft.T F
Sale of an aircraft by a broker is generally the quickest and simplest method.T F
A lease is generally not considered debt.T F
For income tax purposes, the capital lease is treated exactly like a loan.T F
Most firms own or lease aircraft before getting involved with chartering aircraft.T F
It is more cost efficient to charter occasionally than it is to underutilize a larger aircraft. T F
Determine the price of a new, fully equipped, multiengine aircraft, then compare its price with the same model used aircraft using the Aircraft Bluebook, Trade-a-Plane, local newspapers, or similar source.
Request copies of sample aircraft leases from several sources and compare the terms under each example.Select a new aircraft and compare the cost of ownership versus leasing for your hypothetical example.
Develop a chart which clearly demonstrates the advantages and disadvantages of ownership, leasing, and charter. Also include the circumstances under which each method would be most appropriate (e.g., hourly utilization needed, flexibility, safety, costs, etc.).
Compare the charter and contract flight service rates for several FBOs in your area. Develop a list of prospects for these services. What criteria did you establish for inclusion on your list (e.g., annual sales, profitability, number of employees, marketing area served, type and amount of
Discuss with a local financial institution the criteria it uses to evaluate a retail dealer for its floor planning programs and the key components of its current plan.
A value analysisa. substantiates the relative equivalence of the business aircraft's direct costs versus present travel costs.b. only looks at intangible benefits of aircraft ownership.c. provides a clear indication of the amount of manpower time saved.d. both a and c are correct.
The most commonly used value per man-hour formula isa. Average Salary x 3c. Average Salary x 2.5 2,500 hours 2,000 hoursb. Average Salary x 2.5d. Average Salary x 2 2,500 hours 2,000 hours
The "En Route Productivity" factora. develops a higher dollar credit for airline travel then for business aircraft travel.b. is concerned with time savings due to shorter flights.c. recognizes that corporate aircraft are an extension of the executive's office.d. is just theory and has no real-world
When corporate aircraft are used on business flights, time savings result froma. using general aviation terminals in hub areas.b. ability to land at smaller airports closer to final destination.c. faster air speed than air carriers,^^vboth a and b are correct.
The break-even load factor showsa. a comparison between airline ticket cost and hourly cost of use for an aircraft for a specific trip.b. a comparison between maximum passengers compared with maximum cargo.c. number of passengers required for a charter operation to break-even.d. none of the above.
of an aircraft is the basis for productivity.a. Fuel efficiency /ffc^ Utilizationb. Purchase price /^BaComfort
intangible benefits of business aircraft ownership include\ \ k. increased management mobility.c. public relations tool.^-/d. recruiting tool for management personnel. (d\all of the above.
For a corporation to justify the purchase of a business aircraft the aircrafta. must do what a company is now doing, only faster and cheaper.b. ownership costs must be lower than current ticket costs.c. all management must have equal access to the aircraft.d. the aircraft must make a major
Factors to consider when determining just what "saved time" is worth includea. comfort.c. additional productive business hours.b. effect on energy and morale.d. all of the above.
A value analysis is a powerful sales tool because it convincingly demonstratesa. the dollar savings derived from tax savings.b. time savings due to the faster airspeed of the business aircraft.c. the ability of a business aircraft to deliver a management team to its destination with a minimum of
is a quantitative comparison of actual business trips taken by company personnel.a. Value analysisb. Productivity analysisc. Time savings analysisd. Value per man hour analysis
The traditional formula used in determining the value per man hour figure uses hours in the formula.a. 1,500b. 2,000c. 2,500d. hours are not used in the formula
The "en route productivity" credit for time spent aboard a corporate aircraft is estimated at percent.a. 15b. 25c. 65d. 75
The "en route productivity" credit for time spent aboard a commercial airliner is estimated at percent.a. 15b. 25c. 65d. 75
All of the following are intangible benefits categories of using business aircraft excepta. increased management mobilityb. outpace competitionc. reduction of total transportation costsd. more contacts with present customers
When there is a cost trade-off against time, the following factors must be considered excepta. seasonal peak demand requirementb. emergency need for travel to be accomplishedc. perishable nature of a situationd. convenience and comfort of the travelers
Value analysis is a quantitative comparison betweena. two business trips using competitive business aircraft pr-ivjo business trips using different routes fc. Iwo business trips using a business aircraft in comparison with the scheduled airlines Ljek two business trips using a business aircraft
When the salesperson selects the business trip to use in the value analysis, he/she shoulda. select one going to a busy hub cityb. always make it the longest in terms of milesc. select one that is not well served by scheduled airlinesd. select one that is infrequently used by the prospect
The following factors contribute to low productivity of executives aboard a commercial airliner excepta. lack of work facilitiesb. noise level of the enginesc. hesitancy to discuss sensitive corporate mattersd. distractions resulting from mass handling of passengers.
The justification for a much higher productivity credit for travel aboard a business aircraft include all of the following excepta. cabin configurationb. ability to use smaller landing fieldsc. privacyd. ability to discuss sensitive issues
Value analysis is a quantitative cost comparison between two business aircraft.T F
En route time in a corporate aircraft receives a 75% productivity credit.T F
The standard 40-hour work week is often modified to a 50-55 hourly week in determining the value per T F
The hourly cost of use of a business aircraft does not change with the passenger density.T F
Morale costs are important considerations and they include off-hour travel time.T F
Executives recognize that tangible, rather than intangible factors usually provide the margin of profit in man hour.business aircraft use.T F
The ultimate reason for using business aircraft is to save time.T F
Flexibility of use is an important intangible benefit of business aircraft ownership.T F
Underutilization of the business aircraft is not a concern because all costs of ownership are directly related to hours of use.T F
Intangible benefits can be quantified to assist in justifying the purchase of a business aircraft.T F
The "en route productivity" factor used in the value analysis was first introduced by Cessna Corporation.T F
Speed of the corporate aircraft is one of the justifications used in the "en route productivity" analysis.T F
It would be short sighted to use an aircraft only to do what a company is currently doing, only in a faster and cheaper manner.T F
Saving clock time through the use of a business aircraft will also often increase morale and an executive's energy level.T F
Retaining and recruiting key personnel is an important intangible benefit of business aircraft ownership.T F
Intangible benefits are those that cannot be wholly quantified in terms of dollars saved or revenue produced. T F
Saving time for key personnel is only important from a pure clock-time standpoint. T F
The higher the load factor, the more advantageous the business aircraft travel costs become. T F
Business aircraft have been referred to as time machines. T F
Comfort is a major intangible item when executives are the principal users of the aircraft. T F
From a sales and marketing standpoint, what kind of destination should be selected to be included in the value analysis?
The traditional productivity factor used in determining value per man-hour is 2.5. Should a corporation expect greater productivity from its middle and upper management?
A corporate airplane is a time machine. Identify five specific areas where time can be saved when the business airplane replaces the airline.
"En Route Productivity" credit is only allowed on the actual flight time in the Value Analysis. Why is it inappropriate for the credit to be applied to the total time of the trip?
When a large percentage of a corporation's business travel is between hub cities, it is quite difficult to justify the purchase of a business aircraft. Why? What role would intangible benefits play in this situation?
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