What Is a Loyalty Program

question 15

Multiple Choice

What is a loyalty program?

• A) A program that rewards suppliers when delivery of products and services exceeds expectations
• B) An analysis of customers and their recurring purchasing habits with your business
• C) A reward system for customers based on the amount of business they do with your business
• D) A process of moving into a new market for a particular product or service

Recognize financial instruments or arrangements that fit the definition of a perpetuity.

Calculate the future value of investments with uniform or varying cash flows using appropriate financial formulas.

Distinguish between different types of interest rates (APR, compound interest rate, effective annual rate).

Understand and apply the concept of the time value of money to evaluate financial decisions.

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Definitions:

Capital Lease

A lease agreement that is recorded as an asset on the lessee's balance sheet because it essentially transfers the risks and rewards of ownership.

Capital Lease Obligation

A lease classified as a financial transaction where the lessee essentially buys an asset and borrows the funds through a lease.

Periodic Cash Payments

Regular financial payments made over a stipulated period, such as dividends or loan repayments.

Depreciation Expense

Methodically spreading out the expense of a physical asset across its period of usability.