Jefferson Airways, started in 2010, has a frequent flyer program. During 2010, Jefferson's customers earned 200,000,000 miles and redeemed 120,000,000 of those miles for free tickets. The program's terms require customers to exchange 40,000 miles for one free ticket. Jefferson Airways' average free ticket cost is $175. What is Jefferson's total liability relative to its frequent flyer program at December 31, 2010?
A) $ 0
B) $350,000
C) $525,000
D) $875,000
E) none of the above

Question

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The Answer of Jefferson Airways, started in 2010, has a frequent flyer program. During 2010, Jefferson's customers earned 200,000,000 miles and redeemed 120,000,000 of those miles for free tickets. The program's terms require customers to exchange 40,000 miles for one free ticket. Jefferson Airways' average free ticket cost is $175. What is Jefferson's total liability relative to its frequent flyer program at December 31, 2010?
A) $ 0
B) $350,000
C) $525,000
D) $875,000
E) none of the above

Jefferson Airways, Started in 2010, Has a Frequent Flyer Program