In a synthetic lease, who retains the title to the aircraft?
(Reference: Purchase vs. Lease Considerations in Acquiring an Aircraft Used in Business
Content Area: BM2)
- The lessor
- The aircraft operator
- The FAA
- The aircraft owner
The Lessor
When payments are made by political candidates for air transportation, what taxes are applicable?
A. None political travel is considered nonprofit
B. Federal Air Transportation Excise Taxes
C. Federal IRS Use Tax
D. State and Local Sales Tax
Federal Air Transportation Excise Taxes
Direct operating costs include which of the following:
A. Aircraft refurbishment and training
B. Overhauls and restoration allowance
C. Flight expenses and training
D. Catering and insurance
Overhauls and restoration allowance
Aviation entities run most effectively when following the template of management guidelines set forth by
NBAA
The degree to which an organization achieves a stated goal
Effectiveness
Fractional ownership requires companies to have on file
A. Dry lease purchase agreement
B. LOA RVSM certification
C. 91K approval POI approval
D. Wet lease interchange agreement
Dry lease purchase agreement
Within a corporate aviation department, who should possess a knowledge and appreciation of company business in terms of cost-effectiveness, operational control and planning for future requirements?
(Reference: NBAA Management Guide
Content Area: BM2)
All aviation department personnel
A company’s wholly-owned subsidiary owns an aircraft. Another subsidiary provides aircrews, scheduling and maintenance for the aircraft, and all subsidiaries participate in paying the operational costs. Under these circumstances, what entity is BEST suited to provide regulatory interpretation regarding operational control of the aircraft?
(Reference: NBAA Management Guide
Content Area: BM2)
- Department of Commerce
- Local FAA FSDO
- IRS business services
- Corporate general counsel
Local FAA FSDO
Under Part 91 regulations, when reducing liability to the parent company by placing the aircraft in a separate company, one requirement is that:
(Content Area: BM2)
A. the operation of the aircraft is incidental to the business of the newly formed company.
B. one CEO is directly responsible for both companies.
C. the flight crew is employed by the newly formed company.
D. the placement of the aircraft is evidenced by a written purchase agreement and signed by the parent company.
A. the operation of the aircraft is incidental to the business of the newly formed company.
What is an example of a Direct Operating Cost?
A. Annual insurance premium
B. Hour limited parts replacements
C. Hangar expenses
D. Depreciation
Hour limited parts replacements
An aviation department manager is in the process of deciding which of two similar aircraft to purchase. Included in the data are costs for the flight crew (same for both), airplane acquisition costs, fuel consumption per hour per airplane, maintenance costs expected for each airplane and parking/landing fees. The cost considerations relevant to the decision are:
( Reference: Practical Applications in Business Aviation Management
Content Area: BM6 )
- all costs (e.g., taxes and delivery) that are included to determine total acquisition cost for each aircraft.
- all costs related to the purchase and future use of the aircraft.
- the costs that vary between alternatives.
- any costs that do not vary among alternatives, if they are critical to the future operation of aircraft.
the costs that vary between alternatives.
Which of the following should be considered in order to determine a company’s need for business aircraft?
( Reference: Practical Applications in Business Aviation Management
Content Area: BM2 )
- Acceptance of aircraft ownership by the company’s employees
- Acceptance of aircraft ownership by the company’s stakeholders
- Confidentiality, control and comparative analysis for potential use of business aircraft
- Consideration, cost and comparative analysis for potential use of business aircraft
Consideration, cost and comparative analysis for potential use of business aircraft
After six months of flying in the company’s new aircraft, the CEO begins flying with key corporate management team members and board members. How should the aviation department manager assess the risk potential?
( Reference: Aircraft Insurance Fundamentals
Content Area: BM2 )
- obtain recent accident reports and identify similar equipment comparisons.
- obtain recent aviation statistics and work with an aviation attorney.
- evaluate the magnitude of loss, possible improvements for maintenance reliability of equipment and flight standards within the department.
- analyze the frequency of activity, the severity of the loss, the variation of future loss and the impact of loss to the corporation.
analyze the frequency of activity, the severity of the loss, the variation of future loss and the impact of loss to the corporation.
The _________ is an association representing business aviation associations around the world.
IBAC
If a particular flight is subject to federal excise tax, who is responsible for the tax?
( Reference: NBAA Federal Excise Tax Handbook
Content Area: BM2 )
- The entity that owns the aircraft is responsible for collecting and remitting the tax
- The entity billing the end-user customer is responsible for collecting and remitting the tax
- The entity billing the end-user customer is responsible for collecting the tax and the entity that owns the aircraft is responsible for remitting the tax
- The entity that is the end-user customer is responsible for collecting and remitting the tax
The entity billing the end-user customer is responsible for collecting and remitting the tax
According to ICAO Annex 6 Part II, when an aircraft is leased, the ______ is responsible for recording keeping of the aircraft.
Lessee
In preparing an aviation department budget for the next fiscal year, the aviation department manager is looking at implementing a chargeback system. A chargeback rate that incorporates only direct aircraft operating costs (DOC):
( Reference: NBAA Management Guide
Content Area: BM3 )
- will tend to encourage overall use at all levels of the company unless limited by policy.
- is the only practical method since direct operating cost is readily measurable.
- is prohibitive for turbojet aircraft due to high fuel consumption costs.
- will be hard to sell to company officials since it ignores the greatest portion of aircraft costs.
will tend to encourage overall use at all levels of the company unless limited by policy.
Industry best practices recommend that Noise Abatement Programs should:
(Reference: NBAA Management Guide
Content Area: BM7)
- not apply to non-turbine aircraft.
- supersede the manufacturer’s recommended procedures.
- only apply to older turbojet aircraft manufactured prior to 1980.
- include procedures that provide for safety and standardization.
include procedures that provide for safety and standardization.
Which training should be part of each aviation department member’s career development plan?
A. Basic Management
B. International Operations
C. Scheduling
D. Taxation
Basic Management
IS-BAO (International Standard for Business Aircraft Operations) is designed for corporate flight departments to achieve _____:
Highest level of safety and professionalism
Relating to aircraft fixed cost, which of the following BEST describes book depreciation?
( Reference: NBAA Management Guide
Content Area: BM3 )
- For equal time horizons, book depreciation must be the same as tax depreciation
- For equal time horizons, book depreciation will usually be less than tax depreciation
- Depreciation requires inclusion of a 25 percent residual value
- Depreciation is considered to be a major nonrecurring expense
For equal time horizons, book depreciation will usually be less than tax depreciation
Where in the corporate structure should the aviation department be placed?
( Reference: Practical Applications in Business Aviation Management
Content Area: BM1 )
- Under the vice president of operations
- In the logistics/transportation area
- Under human resources
- As high as possible in the corporate structure
As high as possible in the corporate structure
According to IRS regulations, which party is responsible for payment of employment tax when a third-party firm provides the services?
A. Contract employee
B. Thirdparty firm
C. Tax exempt
D. Aircraft owner
Thirdparty firm
The biggest difference between an annual operational budget and a capital budget is:
capital items need more justification
