Topnotch company uses a Freemium model andhas 200,000 users, a 5% conversion rate, and a10% churn rate. The average cost to serve a PayingUser is $100/year and the Annual Revenue/ PayingUser is $500/year. The Cost to Support a Free useris negligible.Calculate Retention Rate, Lifetime of a Paying User,ARPPU, ARPU, Number of Paying Users, CLV of apaying User, and Annual Contribution forTopnotch.IMPORTANT: Please include managerialperspectives when answering the question(elaborate what the answer means for thecompany/firm moving forward).

"Since you have asked a question with sub-parts more than three, as per guidelines, the first three…

Topnotch company uses a Freemium model and has 200,000 users, a 5% conversion rate, and a 10% churn rate. The average cost to serve a Paying User is $100/year and the Annual Revenue/ Paying User is $500/year. The Cost to Support a Free user is negligible.

Topnotch company uses a Freemium model and has 200,000 users, a 5% conversion rate, and a 10% churn rate. The average cost to serve a Paying User is $100/year and the Annual Revenue/ Paying User is $500/year. The Cost to Support a Free user is negligible.

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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Question

Topnotch company uses a Freemium model and
has 200,000 users, a 5% conversion rate, and a
10% churn rate. The average cost to serve a Paying
User is $100/year and the Annual Revenue/ Paying
User is $500/year. The Cost to Support a Free user
is negligible.
Calculate Retention Rate, Lifetime of a Paying User,
ARPPU, ARPU, Number of Paying Users, CLV of a
paying User, and Annual Contribution for
Topnotch.
IMPORTANT: Please include managerial
perspectives when answering the question
(elaborate what the answer means for the
company/firm moving forward).

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