do you include taxes when calculating value of a point?
Feb 26, 2023 | 10:51 pm
#1
Original Poster
Join Date: Feb 2012
Posts: 997
do you include taxes when calculating value of a point?
Suppose a one way business class ticket costs $3000.
A, You spend 90,000 miles + $500 taxes/surcharge to buy the ticket.
B. You spend 90,000 miles + $5 taxes/surcharge to buy the ticket.
What is the value of the point/mile in A vs B?
A, You spend 90,000 miles + $500 taxes/surcharge to buy the ticket.
B. You spend 90,000 miles + $5 taxes/surcharge to buy the ticket.
What is the value of the point/mile in A vs B?
Feb 26, 2023 | 11:00 pm
#2
FlyerTalk Evangelist
Join Date: Dec 2003
Location: Not here; there!
Programs: AA Lifetime Gold
Posts: 34,988
Just subtract the cash component of the award ticket from the cost of the all-cash ticket. Then, divide the difference by the number of miles to determine the value per mile. (Most people would want to know the value in cents per mile, so in example A, you would divide 250,000 cents by 90,000 miles to get a value of ~ 2.77 cents per mile.)