XYZ has determined that market dynamics will result in some annual variations in the numbers they had previously estimated. Deeper market research has revealed that the cost of acquiring a customer is estimated to be $2,000. Also, estimates over five years for the remaining customers at the end of each year with average revenues and cost for each customer are presented in the following table. Considering a discount rate of 15%, calculate the net CLV for XYZ. Discount rate= Number of Customers Revenue Per Customer Variable Cost Per Customer 15% Year 0 200 Year 1 150 5,000 2.000 Year 2 120 5,000 2.000 Year 3 90 5,500 1.800 Year 4 72 5,500 1.800 Year 5 54 6,000 1.500
XYZ has determined that market dynamics will result in some annual variations in the numbers they had previously estimated. Deeper market research has revealed that the cost of acquiring a customer is estimated to be $2,000. Also, estimates over five years for the remaining customers at the end of each year with average revenues and cost for each customer are presented in the following table. Considering a discount rate of 15%, calculate the net CLV for XYZ. Discount rate= Number of Customers Revenue Per Customer Variable Cost Per Customer 15% Year 0 200 Year 1 150 5,000 2.000 Year 2 120 5,000 2.000 Year 3 90 5,500 1.800 Year 4 72 5,500 1.800 Year 5 54 6,000 1.500
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
![XYZ has determined that market dynamics will result in some annual variations in the numbers
they had previously estimated. Deeper market research has revealed that the cost of acquiring
a customer is estimated to be $2,000. Also, estimates over five years for the remaining
customers at the end of each year with average revenues and cost for each customer are
presented in the following table. Considering a discount rate of 15%, calculate the net CLV for
XYZ.
Discount rate =
15%
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Number of Customers
200
150
120
90
72
54
Revenue Per Customer
5,000
5,000
5,500
5,500
6,000
Variable Cost Per Customer
2,000
2,000
1,800
1,800
1,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faa2234a1-a525-4d5a-8356-3d1b5620c498%2F27063b71-2eec-4cd4-b05c-12b1d563fde7%2Ffx1feak_processed.png&w=3840&q=75)
Transcribed Image Text:XYZ has determined that market dynamics will result in some annual variations in the numbers
they had previously estimated. Deeper market research has revealed that the cost of acquiring
a customer is estimated to be $2,000. Also, estimates over five years for the remaining
customers at the end of each year with average revenues and cost for each customer are
presented in the following table. Considering a discount rate of 15%, calculate the net CLV for
XYZ.
Discount rate =
15%
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Number of Customers
200
150
120
90
72
54
Revenue Per Customer
5,000
5,000
5,500
5,500
6,000
Variable Cost Per Customer
2,000
2,000
1,800
1,800
1,500
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