Question: Following is a lifetime-value analysis framework similar to that presented in the chapter. Perform the calculations necessary to complete row K: Year 1 Year 2

Following is a lifetime-value analysis framework similar to that presented in the chapter. Perform the calculations necessary to complete row K:

Year 1 Year 2 Year 3 Year 4 Year 5 Revenue A

Year 1 Year 2 Year 3 Year 4 Year 5 Revenue A Customers B Retention rate 30% C Average yearly sales D Total revenue 2,000 40% 55% 65% 70% $2.50 $250 $250 $250 $250 Costs E Cost 50% 50% 50% 50% 50% percentage F Total costs Profits G Gross profit H Discount rate 1 1.15 I NPV profit J Cumulative NPV profit K Lifetime value per customer

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