Answer:
Assuming that the elimination of frequent-flyer programs would have enabled the airlines to earn higher profits and remain in business, then it would be a purely good idea for the airlines to eliminate their frequent-flyer programs.
The big question is, how much did the frequent-flyer programs cost the airlines? Would the cost-savings be sufficient to eliminate their bankruptcies? It is a known-fact that the airlines that create such programs always recover the program costs by charging higher fares.
Explanation:
The issue of airlines going bankruptcy does not seem to stem from customer-loyalty programs like the frequent-flyer programs. The root cause lies in operational and other costs that airline managements have not been able to control.
Financial, operational, perimeter, and strategic risks.
Like costs, labor, and weather.
Answer:
Loss of $7,000
Explanation:
Data provided in the question:
Purchasing cost = $78,000
Residual value = $3,000
Useful life = 5 years
Selling cost = $8,000
Now,
Annual depreciation = [ Cost - Residual value ] ÷ Useful life
= [ $78,000 - $3,000 ] ÷ 5
= $75,000 ÷ 5
= $15,000
Therefore,
Accumulated depreciation of 4 years = 4 × Rate of depreciation
= 4 × $15,000
= $60,000
Therefore,
Book value at the end of 4 year = Cost - Accumulated depreciation
= $75,000 - $60,000
= $15,000
Since,
Book value at the end of 4 year is greater than the selling cost
therefore,
there is loss = Book value - Selling cost
= $15,000 - $8,000
= $7,000
Hence,
Loss of $7,000
Answer:
<u>Targeting</u> Strategy
