An e-commerce site that sells beverages has enrolled 17,863 into a coffee club. The financial data is provided in Figure 9.19. The retention rate for Year 2 was 43% and for year 3 was 68%. While the average number of purchases of coffee per year increased each year, the average sales per purchase did not increase significantly. The company calculated they spent $175,000 to develop the coffee club. Calculate the net marketing contribution for each year, the cumulative net marketing contribution, and the overall lifetime value of the members in the coffee club.

An e-commerce site that sells beverages has enrolled 17,863 into a coffee club. The financial data is provided in Figure 9.19. The retention rate for Year 2 was 43% and for year 3 was 68%. While the average number of purchases of coffee per year increased each year, the average sales per purchase did not increase significantly. The company calculated they spent $175,000 to develop the coffee club. Calculate the net marketing contribution for each year, the cumulative net marketing contribution, and the overall lifetime value of the members in the coffee club.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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