The following table shows CLV for A company. What is the CLV of the first year (please round it up)?Profit per Annual Customer AnnualYear CustomerRetention Accounts Discount Discount($) Probability RemainingRate01 502 703↑75414243444590%87%85%1009078.366.50.10.1Cumulative DiscountedCash Flow($)00.1Factor0.910.830.75

Customer profit=$50Probability year 1=0.9Discount factor year 1=0.91

Year CustomerRetention ($) 0 Profit per Annual Customer Annual 1 50 2 70 Cumulative Discounted Accounts Discount Discount Cash Flow ($)0 ProbabilityRemainingRate 90% 87% 100 90 78.3 0.1 0.1 Factor 0.91 0.83

Year CustomerRetention ($) 0 Profit per Annual Customer Annual 1 50 2 70 Cumulative Discounted Accounts Discount Discount Cash Flow ($)0 ProbabilityRemainingRate 90% 87% 100 90 78.3 0.1 0.1 Factor 0.91 0.83

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

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Question

The following table shows CLV for A company. What is the CLV of the first year (please round it up)?
Profit per Annual Customer Annual
Year CustomerRetention Accounts Discount Discount
($) Probability RemainingRate
0
1 50
2 70
3
↑
75
41
42
43
44
45
90%
87%
85%
100
90
78.3
66.5
0.1
0.1
Cumulative Discounted
Cash Flow
($)0
0.1
Factor
0.91
0.83
0.75

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