Compute the customer lifetime value for Customer 421 based on the data below for the first six
Question:
Compute the customer lifetime value for Customer 421 based on the data below for the first six years of the customer relationship. Costs (ct) were incurred to promote customer retention to a rate of 0.8 in years 1 through6.
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CUSTOMER 421 Initial acquisition cost $600 n = number of years retained 6. 0.8 r= retention rate for each of the n years retained Cost of capital 0.1 M, = margin from customer in yeart $250 M1 M2 300 M3 325 M4 350 M5 375 M6 400 60 50 C2 50 50 40 C5 40 C6
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Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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