A Customer Loyalty Provision Specifically Refers to

question 17

Multiple Choice

A customer loyalty provision specifically refers to

• A)points that a customer has redeemed in the past.
• B)the liability related to the unused loyalty points or credits.
• C)the revenues earned from the use of points.
• D)the cash received from the use of points.

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Definitions:

Present Value

The worth as of today of a future money sum or cash flow series, taking into consideration a specific rate of return.

Present Values

This is a concept in finance that calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Discount Rate

This rate is applied in the framework of DCF analysis for the purpose of calculating the current value of foreseeable cash flows.

Compounded Annually

Compounded annually refers to the calculation and addition of interest to the principal sum of a loan or deposit once every year.