What is the customer lifetime value of customer W. Harrelson for the first three years of the customer relationship?
Initial acquisition cost $2,100
n = number of years retained 3
r = retention rate for each of the n years retained 0.8
Cost of capital 0.1
M1 Margin from customer in year 1 $1,500
M2 Margin from customer in year 2 $1,800
M3 Margin from customer in year 3 $1,950
c1 cost $360
c2 cost $300
c3 cost $300
A) $825.12
B) $2,925.12
C) $6,390.00
D) $4,190.00
A
Explanation: A)
Business
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