following information is available to estimate customer lifetime value for a new customer: Average order: $ 464 Frequency of orders: 2.2 /year Average margin: 60 % markup on retail Customer retention rate: 58 % Promotional/communication costs/yr $ 48 Your discount rate: 9 % Customer acquisition cost $ 171

following information is available to estimate customer lifetime value for a new customer: Average order: $ 464 Frequency of orders: 2.2 /year Average margin: 60 % markup on retail Customer retention rate: 58 % Promotional/communication costs/yr $ 48 Your discount rate: 9 % Customer acquisition cost $ 171

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 84PSA

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A tree provider to plant nurseries is trying to use customer lifetime value to determine the value of its customers. Two customers are shown below. Use customer lifetime value to determine the importance of each customer. Use a 7 percent discount rate. Avg. Annual Sales Avg. Profit Margin Customer A: Customer B: $26,500 $14,000 Do not round intermediate calculans. Round your answers to the nearest dollar. NPV (Customer A): $ 25% 15% Expected Lifetime 11 years 7 years NPV (Customer B): $ What do you recommend? -Select- is more important.
A tree provider to plant nurseries is trying to use customer lifetime value to determine the value of its customers. Two customers are shown below. Use customer lifetime value to determine the importance of each customer. Use an 8 percent discount rate. Avg. Annual Sales Avg. Profit Margin 10% $12,500 $26,000 20% Do not round intermediate calculations. Round your answers to the nearest dollar. NPV (Customer A): $ NPV (Customer B): $ What do you recommend? Customer B ✓ Customer A: Customer B: is more important. Expected Lifetime 5 years 9 years
Subject - account Please help me. Thankyou.
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Could you please answer the quesion below and show solution. THanks!