Suppose that there has been no additional acquisition and no customer who has returned as an active customer once she left. Which of the following statements is NOT correct? A) The acquisition rate is 5%. B) The retention rate at the end of year 2 is 29.63%. C) The acquisition cost per customer is $15. D) The survival rate at the end of year 1 is 53.22%.
Suppose that there has been no additional acquisition and no customer who has returned as an active customer once she left. Which of the following statements is NOT correct? A) The acquisition rate is 5%. B) The retention rate at the end of year 2 is 29.63%. C) The acquisition cost per customer is $15. D) The survival rate at the end of year 1 is 53.22%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Suppose that there has been no additional acquisition and no customer who has returned as an active customer once she left. Which of the following statements is NOT correct?
A) The acquisition rate is 5%.
B) The retention rate at the end of year 2 is 29.63%.
C) The acquisition cost per customer is $15.
D) The survival rate at the end of year 1 is 53.22%.
Transcribed Image Text:A catalog retailer spent $150,000 to acquire 10,000 customers from a target market with 200,000 people
and have tracked the acquired customers for 2 years. The following table shows how many customers
were still active at the end of each year:
Time
# of active customers
Initial
10,000
End of year 1
5,322
End of year 2
2,963
Suppose that there has been no additional acquisition and no customer who has returned as an active
customer once she left. Which of the following statements is NOT correct?
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