Avit 402 Exam 3 Questions and Answers Fully Solved Latest Update

Avit 402 Exam 3 Questions and Answers Fully Solved Latest Update Operating expenses - Answers The cost you'll be paying only if the airport is opearting Non-opearting expenses - Answers The cost you'll have to pay even if the airport is not running Examples of non-operating expenses - Answers Interest on debts Contributions to organizations (AAAE) Do airports get a lot of money from aircraft parking? - Answers No Types of budgeting [4] - Answers Lump sum Appropriation by activity Line item budget Zero-budget Lump sum budgeting - Answers A lump comes in and you allocate it to different sectors Mostly used by small GA airports Appropriation by activity budgeting - Answers Distributes funding for each sector Looks like a funding tree Line item budgeting - Answers Most detailed plan used at major airports. It comes up with numbers and how much increase/decrease it will have in the short future. Zero-based budgeting - Answers Managers for each sector prepares the costs and a review board sorts them in order of importance and allocate the budget The idea behind a zero-baed budgeting - Answers Mangers are forced to look at a program in its entirety Budgeting system used at most commercial airports - Answers Line item budgeting Two types of financial management at commercial airports - Answers Residual cost approach Compensatory approach Residual cost approach vs. Compensatory approach, which is newer? - Answers Compensatory approach Residual cost approach - Answers Airlines cover the deficits and make airports break even Compensatory approach - Answers Airlines pay charges set by the airport to the airport Residual cost approach vs. Compensatory approach, what kind of investments? - Answers Residual cost approach has a long-term investment, and bonds are usually issued Areas airports make money [3] - Answers Airfield (landing fees, fuel flowage, etc.) Terminal (leasing space to shops) Airline leased areas (gates, operations, etc.) 3 types of airline leased areas - Answers Exclusive use (one user) Preferential use (more than one user, but only one user is treated with preference) Joint use (mutual, equal use)