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YZ LTD Charges INR 250 per Month to its Subscribers. It's margin per customer is 60%. It spends INR 600 per Year per customer as retention cost. XYZ Ltd works at discount rate of 5% and is able to retain 90% customers on yearly basis 1. What is CLV of an XYZ Ltd Customer? 2. If XYZ Ltd spends INR 1500 in acquiring one customer, what is net CLV of XYZ Ltd customer? 3. If XYZ Ltd increases its monthly subscription rate to INR 300, customer retention rate drops to 80%. Is it a profitable move? • If XYZ Ltd doubles its spend on retention cost, its customer retention rate improves to 92%. Is it a profitable move?

YZ LTD Charges INR 250 per Month to its Subscribers. It's margin per customer is 60%. It spends INR 600 per Year per customer as retention cost. XYZ Ltd works at discount rate of 5% and is able to retain 90% customers on yearly basis 1. What is CLV of an XYZ Ltd Customer? 2. If XYZ Ltd spends INR 1500 in acquiring one customer, what is net CLV of XYZ Ltd customer? 3. If XYZ Ltd increases its monthly subscription rate to INR 300, customer retention rate drops to 80%. Is it a profitable move? • If XYZ Ltd doubles its spend on retention cost, its customer retention rate improves to 92%. Is it a profitable move?

FINANCIAL ACCOUNTING
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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XYZ LTD Charges INR 250 per Month to its Subscribers. It's margin per customer is 60%. It spends INR 600 per Year per customer as retention cost. XYZ Ltd works at discount rate of 5% and is able to retain 90% customers on yearly basis 1. What is CLV of an XYZ Ltd Customer? 2. If XYZ Ltd spends INR 1500 in acquiring one customer, what is net CLV of XYZ Ltd customer? 3. If XYZ Ltd increases its monthly subscription rate to INR 300, customer retention rate drops to 80%. Is it a profitable move? • If XYZ Ltd doubles its spend on retention cost, its customer retention rate improves to 92%. Is it a profitable move?
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